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Belgium, the heart of the European Union, also suffers from significant debt, and it isn’t immune to contagion. The gap between Belgian 10 year bonds to the benchmark German bunds rose to 139 basis points.

Bloomberg reports:

“Belgium has moved to the foreground as investors ask themselves ‘who’s next?’ to ask for help,” said Carsten Brzeski, an economist at ING Groep NV in Brussels and a former European Commission official. “While there’s little reason for concern based on economic fundamentals, the country’s debt level and political uncertainty added to speculation. Spreads are already at stress levels.”

There’s a big gap between the rich region of Dutch/Flemish speaking Flanders and the French speaking Wallonia, which suffers from high unemployment. The divide between the two regions is growing, with more calls for independence. Belgium doesn’t have a working government for quite a long time.

In the meantime, the yields on Spanish 10 year bonds significantly eased today, and fell from 5.5% to 5.3%. This goes hand in hand with a recovery in the Euro, after many bad days.

For technical levels and analysis, see the EUR to USD forecast.

The pair is currently at 1.3073, in the middle of the 1.30 to 1.3114 range.

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