Contagion Fears Back On Greek Bailout Uncertainty

Published February 16, 2012 9:00AM (EST)

LONDON (AP) — Mounting confusion over whether Greece will get vital bailout cash to avoid defaulting next month is rekindling fears that Europe's debt crisis will spread to bigger countries like Italy.

As stocks and the euro fell on Thursday, borrowing rates rose sharply for Italy and Spain, an indication of renewed investor concerns.

Over the past couple of months, the pressure on the two countries had eased substantially, primarily because the European Central Bank offered super-cheap long-term loans to banks.

But new jitters were creeping into markets as worries grew about a default in Greece next month. Relations between the debt-ridden country and its partners in the eurozone have deteriorated and the planned second bailout has yet to be agreed.

By Salon Staff

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