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France will start a busy week and a busy year of selling debt – it aims to raise 8.5 billion euros on Monday. Also Germany, Belgium and the Netherlands will raise money, but the focus will be on Portugal, which will go for a modest 0.5 billion euros on Wednesday.

Portugal is marked as the next domino in the European debt crisis – asking for a bailout from the European Union – the third country to get a bailout. In an article in the Wall Street Journal, we hear that Portugal may be the last country to be bailed out, meaning the crisis won’t reach the huge economy of Spains:

Intesa Sanpaolo’s forecast assumes the country will turn to European Union for help in the first quarter. But the bank also thinks no further bailouts will follow.

“We believe the euro government bond crisis should be overcome without other countries reaching the point of default,” Intesa Sanpaolo strategists said. If tensions mount but don’t lead to a bailout, the expected trend of euro spreads would not necessarily change a lot, they said.

Anyway, the success or failure of bond auctions in the first week of 2011 will set the tone for the whole quarter, perhaps for the full year.

Some fear that 2011 will be much worse – Credit Crunch 2.

The Euro ended the year on a high note, 1.3383. What’s up for the Euro this week ? Check out the EUR/USD forecast.