Wall Street Journal
January 7, 2011
The euro zone's debt stresses are back in force at the end of the first trading week of 2011, touched off by new political paralysis in Belgium, signs of slowing economic recovery and a proposed European Union rule that private investors take a hit in cases of bank failures.
The euro slipped to its lowest levels since September against the dollar Friday, with chart patterns pointing to a potentially large decline. The cost of insuring Western European government bonds against default hit a record high as fiscally-weaker government bond markets slumped.
December had brought a period of calm in this long-running drama, as investors pared back bets towards the end of the year. Now, government bond markets are in turmoil once again, the euro currency is falling, and nerves are building over the timing of the next big bailout for an under-pressure euro zone member.
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