Eurozone in crisis as Irish bailout fails to assuage investor fears

Confidence in the eurozone was further eroded this morning as the cost of insuring government debt rose sharply to record levels, and the euro hit a 10-week low. The financial markets continued to punish the peripheral members of the eurozone, with Spain, Italy, Portugal and Ireland all seeing their borrowing costs increase. Spanish and Italian bond yields showed the sharpest rises this morning, as Ireland's €85bn (£72bn) bailout failed to bolster confidence. The euro fell more than a cent against the dollar, to $1.2982. And there were also worrying signs that blue-chip companies are suffering from the uncertainty, with the cost of insuring their debt also rising. The market reaction to the Irish rescue deal shows that investors remain unconvinced the eurozone debt crisis can be stabilized, analysts explained, with many unwilling to buy European sovereign debt. "In speaking to clients and traders yesterday, it's clear that there is extremely low appetite to take fresh peripheral or financial exposure. There are an increasing number of investors who will not touch these assets at any price for now, given all the uncertainty," said Jim Reid of Deutsche Bank.