German Central Bank Official: Risk of European Debt Crisis Sharply Rising

A senior official at the German central bank said recent bond selling in Europe is a 'clear warning signal,' as investor concerns over governments' debt-control measures intensify. Michael Toeller, a member of the executive board of the Bundesbank, told reporters: 'The current situation—mentioning France, and we are also watching the US—indicates that fiscal and political uncertainty will impact the sovereign bond market. While a systemic sovereign debt crisis has not yet erupted, related risks have risen significantly.' Concerns over France's political and economic challenges continue to mount, leading to selling of French bonds and spilling over to other high-debt nations in the eurozone. Markets speculate that the European Central Bank may ultimately have to intervene to curb the spread of the crisis.