Investors doubt euro crisis can be fixed

THE European Union voiced support for Italy and Spain under attack on financial markets but acknowledged that investors now doubt whether the eurozone can overcome its sovereign debt woes.

European Commission president Jose Manuel Barroso said a surge in Italian and Spanish bond yields to 14-year highs was cause for deep concern and did not reflect the true state of the third and fourth largest economies in the currency area.

“In fact, the tensions in bond markets reflect a growing concern among investors about the systemic capacity of the euro area to respond to the evolving crisis,” Mr Barroso said.