From the FINANCIAL TIMES:
Europe’s debt crisis escalated on Monday as Italy and Spain saw their borrowing costs soar by record amounts, hitting bank shares and stock markets globally.
Italy, the eurozone’s third-largest economy and home to the continent’s biggest bond market, saw the premium it pays to borrow over German debt rise by more than a quarter to 3 percentage points, a euro-era high. Spain’s benchmark borrowing costs rose above 6 per cent, also a euro-era high.
The sharp market moves came as a consortium of large European banks with holdings of Greek bonds demanded that the European Union commit itself to a buy-back of the debt, possibly with billions in government money. Without quick action, they warned, countries such as Spain and Italy could be sucked under…
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