See Business Week for example –
Titled – Stocks Up As Euro Worries Ease.
But Did They Ease?
The market is pricing in an increasing risk of default.
The 3.85% April 2021 bond was sold at an average yield of 5.973%, compared with 4.171% at the previous auction in March, while the small volume of Wednesday’s sale drove the bid-to-cover ratio to 2.6 from 1.6. The average price of the 10-year bond came in at a depressed 83.66, versus 97.19 previously, a deep concession….. WSJ
A double-dip recession would hit the economies of Spain, Portugal and Ireland particularly hard, although even core countries, such as France and Germany, could struggle to attract investors, say strategists.