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Europe’s debt crisis enters its third year with no resolution in sight. Greece appears as likely to default now as it did in May 2010, when euro zone countries and the International Monetary Fund cobbled together an aid package — coupled with austerity measures — to enable Athens to meet its obligations.

Before that year ended Ireland became the first beneficiary of the European Financial Stability Facility, a bailout fund created in response to the Greek crisis and supported by the so-called troika: the European Central Bank, the European Union and the IMF. Last spring Portugal followed in Ireland’s footsteps and was granted a reprieve, but by the summer fears of contagion — notably in Belgium, France, Italy and Spain — had become so pronounced that the EU asked contributing countries to increase their commitments to the facility, eventually raising the total amount pledged from €440 billion ($579 billion) to €780 billion.

The EU established the EFSF in part to restore investor confidence. In ­December the ECB stepped up with a historic infusion of cash also aimed at reassuring investors; it agreed to lend more than 500 banks a total of €489 billion for a period of three years at just 1 percent interest. “The difference between December 2011 and January 2012 is striking,” notes Simon Greenwell, who directs coverage of Europe, the Middle East and Africa for BofA Merrill Lynch Global Research. “The large injection of liquidity authorized by the ECB has materially increased the long-term solvency of the EU banking system.”

However, investors’ nerves were rattled anew last month — on Friday the 13th, no less — when Standard & Poor’s cut the credit ratings of nine European countries. France was stripped of its cherished triple-A status, while Cypriot and Portuguese bonds were downgraded to junk (putting them on a level with Greece’s, and fueling speculation that a default by Portugal is all but inevitable). Italy and Spain each was dropped two notches; ­Austria, Malta, ­Slovakia and ­Slovenia were lowered one level apiece.

Three days after these downgrades, S&P cut the credit rating of the bailout fund itself.

“The risk of a sovereign default and the impact of spending reductions taken to avoid this outcome dominated investor sentiment in 2011, and this will extend into 2012,” observes Richard Smith, Deutsche Bank’s director of EMEA equity research. “Politics will have a crucial role to play over the next year.”