April 18, 2011
Market pessimism over whether Greece can shoulder its staggering debts combined with Portuguese politics and a watershed election in Finland to sap confidence in the euro.
The prevailing belief in the financial markets that the eurozone's €110bn (£97bn) bailout of Greece will not prevent the country from having to default on its national debt was underpinned by reports in Berlin that the Merkel government takes the view that Athens will manage only for a few months before defaulting or asking to reschedule.
Meanwhile the prospects of a smooth European rescue of Portugal, the third country in less than a year to require a bailout, suffered from the triumph in Finland of the True Finns party, eurosceptic populists who campaigned on vetoing the Portuguese bailout and look likely to enter a new coalition government.
The True Finns and the social democrats, taking 40% of the vote between them in Sunday's election, are both tipped for government and both campaigned against saving Portugal, highlighting the growing divide in the EU between thrifty northerners incensed at having to pick up the bill for other spendthrifts and resentful southerners balking at the savagery of the cuts they are having to endure to earn the bailouts.
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