German Might Trumps Irish Jitters

摘要

Credit markets have been thrown into a tizzy in recent weeks as investors focused on Ireland and Greece, two euro zone countries with world-class fiscal problems. Now markets are wondering how this will affect the euro, a currency that has been on a tear thanks to Germany's export-fueled growth.Markets certainly fear an Irish flame-out. Irish bond yields have climbed to records relative to German bunds, reflecting heightened default risk. An index of credit-default swaps, which measures the cost of protecting investors in Greek, Irish, Portuguese, and Spanish government bonds from nonpayment, has more than doubled since May 12.