UAE bank steps up support for Dubai

Dubai World said Wednesday it would need to restructure $59 billion in debt, causing a quick ripple of concern in equity markets around the globe. On Monday, after the central bank declared its intention to help, markets in Asia rose on average 2 percent, The New York Times reported.

The debt crisis sparked fears other governments would be over their heads when debt payments came due.

The national debt in Greece gained $10 billion in 2008 to $24 billion. In Bulgaria, Hungary, Latvia, Lithuania and Estonia, debt has surpassed 100 percent of the gross domestic product, the Times said.

"Dubai could be the beginning of a series of sovereign debt issues or crises," said Mohamed A. el-Erian, chief executive officer at Pimco, a bond-trading firm.

"What Dubai is going to do is make people think more intensely about the lagging implications of last year's crisis. It's going to be a wake-up call to the people who thought that the financial crisis was just a flesh wound," he said.

Copyright 2009 by United Press International.