Milburn: Spanish crisis the ultimate test for euro

Spain's economic problems will be the ultimate test for the euro but the currency will emerge stronger, says Aegon's Phil Milburn.

The High Yield Bond manager says the eurozone's sovereign crisis needs to get worse before it gets better and politicians will finally act "once they are pushed against the wall". Although Europe has seen defaults in Greece, soaring government bond yield levels in Portugal and a bail-out in Ireland, Spain is the major issue, says Milburn. He adds: "It is not in the danger zone yet but it has a lot of re-financing to do in April. Spain's fiscal deficit for 2011 could come in at 6%, which is not as bad as some thought, but the problem is the market does not trust Spain's banking sector....