Lisbon, Portugal - the financial difficulties of the Portugal comprehensive Wednesday, with the loan rates jump more top and sliding stocks after its bonds were downgraded to junk status. Spain and the Italy were trained in the downturn, adding a new impetus to Europe's sovereign debt crisis.
Of the Portugal hopes to slowly emerging from its debt crisis is eliminated by Moody, downgraded rating agency four notches of the debt of the Tuesday Portugal, who said the country will probably follow the Greece in need of a second rescue plan.
Portugal took a rescue ($112 billion) billion of euro78 of its European partners and the Monetary Fund International earlier this year after investors nervous reloads it steep unsustainably returns on loans.
After the sharp worsening of the financial situation of the Portugal, the Spain neighbours immediately suffered a ripple effect, with the main stock index of Madrid to the low yield of 1.2% and bond on the rise. Spain, a much larger country, so far, he managed to evade the main benefits of fiscal woes of the continent.
Fears were apparent even in Italy, where stocks fell by 2.4 per cent on concerns that the reduction of expenses might not be enough to bring down the debt.
The idea that the crisis could grow to engulf more savings is a threat to the markets. Save the Spain and the Italy would be several times more expensive than all the rescues that the EU has paid for the time being.
"The growing risk is Italy gets caught up to more than the contagion, and the militia of the bond market dictate a more abrupt rate of its adjustment," said Alan Ruskin, Deutsche Bank analyst.
Decommissioning of the Moody - considered by some analysts and officials such as unexpectedly hard - triggered the new attack on the Portugal, where austerity during the past year have included these increases, pay freezes and cuts in welfare.
Portuguese Prime Minister Pedro Passos Coelho, said that the demotion was "like a punch in the stomach." Fernando Faria de Oliveira, the head of the largest bank of the Portugal, the state-owned Caixa Geral de Depositos, called "immoral and offensive."
Same Barclays Capital Research said that the severity of decommissioning is surprising, adding "it seems more as a response to the Greek."
Tensions are still reflected in sale of Portuguese liaison. While the national debt Agency has succeeded in raising euro848 million ($1.2 billion) market, investors have demanded a high performance. Performance in the sale of the 3-month Treasury bills is 4.926%, against 4.863% on the same invoice mid-June and from the folder 4.967% June 1.
The Portuguese 10-year bond yields rose to 13 percent, while the Lisbon stock exchange decreased by 3% with banks for registration drops more steeply.
Part of the rationale for the decommissioning of Moody was that the determination of the EU for investors from the private sector to share the burden of the guarantors, as for the Greece, the subject of discussion increases the chances of the Portugal being excluded from the market beyond 2013, where he hopes to return to a bond.
The European Commission President José Manuel Barroso, said recovery of the Portugal will be properly followed and evaluated by the Central Bank European and IMF, with an interim report in autumn.
"In this context and the absence of new facts on the Portuguese economy that could warrant a new assessment, decisions of yesterday by one rating agency do not provide for greater clarity." They rather add another speculative element of the situation, "Barroso said in Strasbourg.
German Finance Minister Wolfgang Sch?uble was surprised, too, saying in Berlin, ""... I cannot see that this decision is based on.""
Said Portugal ""is not only entirely on the course, but even ahead of the curve"to implement rescue measures." He has said "Which means nothing, from our point of view... to such an assessment, at least at this stage".
Portugal however is facing a difficult task in reducing the debt burden - it is in recession, with its economy expected to contract by 4 percent by next year, and unemployment reached a record 12.4 percent.
A coalition of center-right government which took office last month promised to comply with the objectives of the debt and economic reforms were required for the rescue plan. It has already introduced for new austerity measures, including a one-time extra tax on the income of individuals, this year and said that it would speed up privatization.
The debt of the Government agency, said last week that he wants to raise to euro6.5 billions of dollars in auctions of Treasury over the next three months.
In Spain, the next market test will take place Thursday, when the Treasury auction of three and five-year bonds.
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Ciaran Giles Madrid, Gabriele Steinhauser Brussels, Colleen Barry in Milan and Geir Moulson Berlin contributed to this report.
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