EUROPE : Tipping Point

The cost of insuring Spanish and Portuguese government debt against default soared on Tuesday, while stock markets in Madrid, Lisbon and Athens posted sharp losses, as fears that the European debt crisis is spreading returned in full force.

Investors are worried that Greek debt may still need to be restructured even after the European Union and the International Monetary Fund came to the rescue with a 110 billion-euro bailout package.

It is a problem of confidence, not speculators. Investors have lost  confidence in Europe…