Forget Greece; next crisis Portugal

LONDON — Next target: Portugal.

Speculators have begun to zero in on another small member of Europe’s troubled monetary zone, highlighting the same economic flaw that brought Greece to the verge of insolvency: a chronically low savings rate that forces a reliance on the now-diminishing appetite of foreign investors to finance persistent deficits.

Just as investors are turning their attention to the next vulnerable country, Greece moved a step closer on Thursday to activating a $61 billion rescue package, as Prime Minister George A. Papandreou asked the European Union and the International Monetary Fund to meet in Athens next week.

The aid package agreed on last weekend — aimed at calming fears of a Greek default — has not yet had its desired effect. The yield on Greek 10-year bonds briefly topped 7.3 percent Thursday, not far from the 7.5 percent it was at before the rescue package was announced. Interest rates on 10-year government bonds for Portugal have also been rising, hitting a high of 4.5 percent on Thursday.

Though Greece’s finance ministry said its request for talks did not necessarily mean it would draw from the funds, it contributed to anxiety that helped push down the value of the euro by 0.008, to 1.3576 against the dollar.

It all raises the prospect that the loan package for Greece, the result of months of political haggling, may be nothing more than a bandage on a wound that shows little sign of healing.

Some analysts think the Greek bailout may have an opposite, more harmful long-term effect. Instead of ushering in a period of lower rates and market calm, it could prompt investors to test Europe’s — and in particular Germany’s — stomach for a rescue of other troubled European economies, beginning with Portugal.

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