Greece Default Push Risks Reviving Contagion as Bonds Plunge

European investors and politicians prodding Greece to restructure its debt may end up wishing they hadn’t.

Talk of restructuring spurred by Germany risks re-igniting Europe’s debt crisis, enveloping Spain just weeks after European leaders said bailouts of Greece, Ireland and Portugal ended contagion. Under a Greek default, Europe’s financial system would strain as banks in and outside Greece and holders of Greek bonds, such as the European Central Bank and domestic pension funds, tally losses.