Debt-ridden European nations such as Greece will likely need further access to bailout funds as European officials maintain that default is a non-starter.
"Restructuring the debt is not an option that is on the table," Joao Vale de Almeida, the European Union's ambassador to the United States said Thursday in Washington. "We have a framework to get through this crisis."
The borrowing cost on 10-year Greek bonds surged to a euro-area record
14.95 percent, compared with 3.31 percent for German debt. European policy makers have struggled to temper investor concern that sovereign debt levels in Europe aren't sustainable nearly a year after EU member countries extended a $160.1 billion bailout to Greece.
Officials have rejected the possibility of a restructuring, or default, by the Greek government, which has slashed spending to reduce its red ink and attempt to restore confidence to bond markets.
But some experts say avoiding such a default will require more subsidized loans from EU members, which plan to raise the lending capacity of its rescue fund to $635.7 billion.
"Greece is as good as certain to get access to more euro-zone funding," said Jacob Funk Kirkegaard, an economist at the Peterson Institute for International Economics, in a phone interview. The effect of a Greek default, he said, would "create a 'death spiral'
with contagion to Spain and Italy."
In November, Ireland took a $123 billion rescue package amid rising yields. Portugal earlier this month asked for a bailout expected to reach $116 billion.
Greece is expected to need to raise upward of $25 billion in long-term debt next year, Kirkegaard said, an impossible feat at current interest rates.
"At some point in 2012, Greece will request more official money," he said.
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