Pacific Investment Management Company (Pimco) CEO and co-chief investment officer Muhammad Ali On November 30, warned Europe that the European debt crisis is being “progressive destruction”, in Greece and Ireland to receive international assistance later, the same fate may also come in Portugal, Spain, Belgium and Italy.

International rating agency Standard & Poor’s announced the same day, in view of the risk to apply for assistance of Portugal rising, bleak prospects for economic growth, the national long-term foreign and local currency sovereign credit rating and short-term foreign and local currency sovereign credit rating on negative watch list. At present, the Portuguese were the two rating “A-” and “A-2”. S & P expects to be completed within the next three months the review rating of Portugal.

By market concerns about psychological pressure from European markets, the euro’s recent poor performance. Analysts expect a stable market, EU authorities may take such measures as expanding the amount of bonds purchased to increase support to Member States.

Assistance to fear a “bottomless pit”

Ai Lian said that European policy makers must be a fundamental solution to the problems the euro, or more EU member states will soon be able to provide assistance and lead to some Member States abandoned the euro in 5 years.

Portugal 30, National Bureau of Statistics reported a third-quarter contraction of domestic investment, industrial output in October fell 2.5%, the highest in 11 months the biggest year on year decline, and decline for the third consecutive month.

French bank Societe Generale said in a report the same day, another has arrived “systemic risk critical point” of the euro zone countries is Spain. SG pointed out that despite strong economic fundamentals, Spain, Greece and Ireland, but the huge private sector debt is its “weakness.” Deutsche Bank also said the debt crisis in Europe a “domino” be backward Spain, an important “watershed” is the country’s private sector will be the debt problem will turn into public sector debt crisis.

Surge in the national debt risk also includes Belgium and Italy. As of the end of 2009, the Belgian public debt to gross domestic product (GDP) share of the third highest in the EU member states. In addition, O’Neill, chief economist of Goldman Sachs noted that, recently, the Italian market sovereign bonds suffered the first attack, if not the EU to take measures to restore market confidence as soon as possible, the country will also face the dilemma in need of assistance.

United Kingdom of Investec Asset Management chief economist Philip Shaw said, “The EU member states assistance sufficient to eliminate the individual investors in the financial market panic.” Bond markets in the region has been a vicious cycle of “high-risk state” sovereignty bond credit default swaps (CDS) prices accelerated.

November 30, Spain and Italy and Germany the 10-year Treasury bond yields over the same period since the advent of difference were a record high of the euro, the Belgian and German 10-year Treasury bond yields over the same period soared to poor the highest level since 1993. Portugal 5-year CDS prices of sovereign bonds of 36 basis points, Spain 5-year CDS prices of sovereign bonds rose 34 basis points, Belgium 5-year CDS prices of sovereign debt hit a record high second straight day, the Italian 5-year CDS price sovereign bonds reached its highest level in 6 months.

Or an increase in EU aid “fire”

The shadow of sovereign debt crisis continued enveloped Europe. November 30, the Italian MIB Index FTSE fell 1.1%, Spanish IBEX 35 index fell 0.6%, Portugal PSI 20 index fell 1.3%. The euro fell below 1.3000 while the dollar mark, falling as low as $ 1.2967. Since November, the euro has fallen 6.5%, the highest since May the biggest monthly decline.

Including Pimco and financial institutions including Deutsche Bank lowered expectations for the euro. Pimco Global Bond Scott, head of investment management Mather expected in the next few months, the euro against the dollar will fall further 10%. Deutsche Bank expected the euro against the dollar, down from the 1.4500 to 1.3800.

European Central Bank President Jean-Claude Trichet said the 30 days, the market should not underestimate the determination to solve the problem in Europe. He hinted that the ECB is likely to significantly expand its purchases of government bonds to hold down soaring borrowing costs.

French bank and financial institutions such as Barclays Capital, expects to increase the EU’s aid policy may include: the stability of Europe 750 billion euros to expand the size of the Fund or to its transformation as an asset acquisition, reduced interest rate relief, joint bond issue of euro area member states and so on.

European Central Bank will be held December 2 monetary policy meeting. Trichet said the bond purchase program, “still in progress”, in addition, do not rule out the euro-zone countries the possibility of joint bond issuance.

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