Portugal

F&C Thames River bond duo Peter Geikie-Cobb and Paul Thursby have warned German bunds are ‘extraordinarily' overvalued and in line for a major correction.

My worst fears about the potential loss of confidence in our leaders, institutions, and capitalism itself are being realised. We have been digging this hole for a long time.

ON EUROPE

EU leaders have agreed a further €109bn (£96bn) bailout for Greece, one-third of which will come from private sector bondholders.

The downgrading of Portugal's debt to 'junk' status by Moody's earlier this week has led to renewed criticism, this time from the European Commission (EC), of the role and behaviour of credit ratings agencies.

The FTSE 100 fell below the 6,000 level in mid-morning trading as European markets absorbed Moody's downgrade of Portuguese debt to 'junk' status.

Moody's has downgraded Portuguese debt to 'junk' status on fears it will need a second bail out just months after it received €78bn.

F&C's director of global strategy Ted Scott on the changing role of the ECB during the debt crisis.

Portugal has moved a step closer to implementing a €78bn bailout programme after the country's Social Democrats (PSD) won a conclusive victory in the general election yesterday.

European governments yesterday discussed the prospect of a fresh multi-billion euro bailout for Greece - just a year after committing €110bn - in a bid to calm the markets and stabilise the region's currency.