In a recent turn of events holders of sovereign debt from Italy, Ireland, Portugal and Greece have sold off some of it, which has increased the yield (amount of interest these countries will have to pay) on their debt. Italy now has to pay 5.35% interest on its debt, while Greece, Ireland and Portugal  now must pay 28%, 16.3% and 18.6% respectively. Spain’s debt was not affected by this recent sell-off but has a current yield of 5.65%. This news is particularly alarming because yield rates had began to stabilize before this recent sell-off. More to the point, Italy (and already struggling Spain) are much more important to the economy of the Eurozone than Ireland, Greece, or Portugal.

A look at this graph on google helps to illuminate the size of the problem. I created this pie graph to show the relative size of the Eurozone’s economies also: (red countries have been bailed out already, pink countries have seen their debt yields rise and ratings fall)