Eurozone Edges Closer to Endgame as Greek Contagion Hits Portugal

The eurozone "lurched towards the endgame" yesterday as Standard & Poor's finally relegated Greece's sovereign credit rating to "junk" status, downgraded Portugal by two steps to A-, and the yields on Greek debt climbed beyond 15 per cent, a signal that the market regards a default as virtually certain.

The contagion that many feared is threatening to overwhelm the entire single currency area in a remarkably short time. The course of events has parallels with the banking crises of the autumn of 2008, when successive institutions came under attack and their interrelationships and size devastated confidence in the financial system, famously so after the failure of Lehman's.'

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