Moody's downgraded Portugal's long-term bonds to junk status Ba2 from Baa1, on grounds that the eurozone bailout in May was unlikely to succeed, that Lisbon would not be fit to return to the markets to fund itself by 2013, and would need a second bailout then, that it was unlikely to meet the austerity targets of the current bailout, and that private creditors would be under pressure from eurozone governments to take a "haircut" or substantial losses on their investments.
Moody's analysis replicated for Portugal almost exactly what has happened in Greece over the past six weeks, suggesting that without decisive action from the big European players, of which there is scant sign, the euro's woes were multiplying.
Case proved? Or at least strengthened? (Ireland is likely to be next ...unless the whole shooting match goes up in flames.)