Such is the herd mentality among investors that it needs only the merest hint of trouble and they are falling over each other in a rush to so-called "safe havens". It really is like so many sheep clustered together at the corner of a field. Russia? Sub-Saharan Africa? Pfah. You can keep your gaudy yields and your fancy returns on capital. Even some more developed "emerging" markets – parts of Asia for example – can expect short shrift. It's German Bunds and US Treasuries for us. Right on cue the former hit a record low yield yesterday morning. Baaaaa!

By Andrew Grice

Voters in Greece and France have voted against austerity. Voters elsewhere in Europe will probably follow suit in time. Despite summits and communiqués, politicians and policy makers cannot miraculously create growth overnight. The only likely action in the short run will probably come from the European Central Bank (“ECB”).

François Hollande’s first act as French president next week will be to fly to Berlin to try to convince Chancellor Angela Merkel to abandon her all-stick-and-no-carrot approach to the European economic crisis.

“Breathe Hellenes, breathe,” the morning show host implored. Greece was waking up to the election results and Real FM was telling its listeners what had happened.

Greece had to be bailed out by the European Union and the International Monetary Fund two years ago because it had lost the confidence of the private financial markets.

Mario Draghi, president of the European Central Bank (ECB), risked the wrath of protesters in Spain yesterday with his backing for the austerity programme which has plunged the nation into a double-dip recession.

Unemployment in the eurozone has reached a record high, with 17.4 million people out of work across the single currency, according to the latest official figures.

Panicking investors sent Spain's cost of borrowing above 6 per cent yesterday, pushing the country closer towards a bailout. The yield on 10-year Spanish bonds rose to 6.15 per cent in trading yesterday morning as the country's Finance Minister, Luis de Guindos, confirmed that the economy contracted again in the first quarter of 2012.

The UK has narrowly avoided a double-dip recession but will struggle for the rest of the year unless businesses stop hoarding cash and start investing, a forecaster warned today.

The Analyst

It is just as well that Spain doesn't need a bailout. Even Mariano Rajoy, the Prime Minister, doesn't believe the eurozone could cope if its fourth-largest economy got into trouble.

Market nerves about the Spanish economy showed signs of spreading to Italy yesterday as Rome saw its medium-term borrowing costs spike. Italy sold €2.9bn in three-year debt at 3.89 per cent yesterday, higher than the 2.76 per cent it was forced to pay at a similar auction last month. Demand for the debt issue was also muted.