some countries in this group to default? The paper presents work of Ostry et al. which defines and measures fiscal space …, Portugal and Spain, probably still have some fiscal space. On the likelihood of default, the paper presents work by Cottarelli … of countries, while large, is not unprecedented, and in any case would not be much reduced by default. The high spreads …

trigger processes of self-fulfilling prophecy that may drive even relatively healthy countries towards default. Keywords …: Sovereign debt ratings, sovereign default, debt crisis, budget deficit, rating agencies, PIGS, risk premiums, government bond …

new shocks (like the Greek Fiscal crisis), the danger of sovereign default and other uncertainties. Full post …