For a while, it looked as if the European Central Bank's €1 trillion credit program to pump liquidity into Europe's banking system had calmed global financial markets. But now interest rates for Italian and Spanish government bonds are on the rise again, closing in on about 6 percent.
Of course, this may not be the breaking point beyond which the debt burden becomes unsustainable. After all, interest rates in Southern Europe were well above 10 percent in the decade before the euro was introduced. Even Germany at that time had to pay bondholders more than 6 percent.
Nevertheless, the markets are clearly signaling growing doubt about whether Spain and Italy will be willing to bear their debt burden.