Euro area under massive speculative attack

European sovereign debt crisis worsen and spreads – with Greek two-year bond yields up at 19%, and Portuguese bonds also under attack; latest dose of panic was caused by a decision from S&P to downgrade Greece to junk status; S&P warns that debtors might only recover 30-50% of their investments, a situation of severe default; negotiations with IMF are likely to be completed within the next few days; Trichet and Strauss-Kahn have descended on Berlin for emergency talks with Merkel; Wolfgang Munchau argues that the German chancellor has set out to destroy the eurozone, and is about to succeed; the estimate by market participants about the loans needed to save Greece is rising by the day – and vastly exceeds the most optimistic estimates coming out of the negotiations in Athens; Bloomberg says the on European bonds is about to spin out of control, as markets in Italy and Ireland have also come under attack; Wolfgang Schauble has already handed out draft legislation, but a vote will not be taken until after the May 9 elections in North-Rhine Westphalia; Kathimerini says the Greek has not enough to explain the urgency of the situation to the Greek people; Willem Buiter, meanwhile, argues that the only way out of this mess is for a negotiated restructuring of Greek debt – and the speedy set up of a European Monetary Fund. Read more...