Greek, Irish Debt Worries Return 
    
By MICHAEL WILSON                And NICK SKREKAS                
Greece  and Ireland bore the brunt of investors' sovereign-debt concerns again  Friday, as bond yields and the cost of insuring government debt against  default rose in both countries.
The new caution rose from news  this week of diverging economic trends in the euro zone, Greece's  deepening recession and perceived solvency problems at Irish banks.
"Just  like during the Greek debt crisis, investors again seem to focus at the  [heterogeneousness] of euro-zone member states, not only in terms of  growth differentials," said Manuel Oliveri, a market analyst at UBS in  Zurich.
The annual cost of insuring $10 million of Greek  government debt for five years rose to $810,000, up $10,000, according  to data provider CMA. Brokers say that this price implies a 40%  probability of default over the next five years.
While still well  below the record of above $1 million hit at the end of June,a senior  trader at an Athens bank called "concerning."
The levels of other  non-core European countries also edged wider. CMA cited the cost of  insuring Irish debt at $283,000, up $4,000 from Thursday, while the cost  of Spanish debt insurance rose $1,000 to $221,000.
Investors are  worried that Irish banks may require so much additional help that it  will open new holes in the Irish government budget. Time pressure is  posed by the expiration next month of the government's guarantee on bank  liabilities.
This was reflected in the premium that the Irish  government must pay for borrowing over equivalent German government  bonds, which are the European benchmark. That rose to 2.99 percentage  points on Friday, from 2.95 percentage points at Thursday's close, and  up from 2.40 percentage points a week ago.
The yield premium on  Greek 10-year government bonds rose to 8.23 percentage points over  German debt from 8.09 percentage points on Thursday and 7.80 percentage  points a week ago.
Spanish, Portuguese and Italian yield premiums also increased over Germany.
(The Wall Street Journal)