LONDON - Europe's debt crisis returned to haunt markets Monday as investors fretted over a possible Greek default and the impact of huge gains for a nationalist party in Finland.

It was also a day that Portugal began discussions on a financial bailout and Spain had to pay a much higher interest rates to tap bond investors.

Although borrowing costs for countries like Greece, Ireland and Portugal have pushed up sharply higher, the euro has managed to brush off debt crisis concerns over recent months, scurrying up to a 15-month above $1.45 against the dollar. The currency has been buoyed by predictions that the European Central Bank will follow up April's first interest rate hike in nearly three years with more policy tightening in the months to come.

That benefits the euro if investors don't expect others, such as the Federal Reserve, to do the same.

However, there doesn't seem to be much of a hiding place for the currency Monday as a stream of potentially negative stories combined, sending the euro down 0.8 percent in early afternoon trade to $1.4296.

Further signs of debt jitters emerged with the news that Spain had to pay sharply higher interest rates to raise euro4.7 billion ($6.8 billion) in short-term debt, while the yield on Greece's 10-year bonds was just shy of 14 percent for the first time since the country took up the euro in 2001.

The renewed focus on Greece's debts has come in the wake of suggestions from a number of people that the country would be better off looking for a way to renegotiate its debts as a way of relieving its crisis.

Costas Simitis, Greece's Socialist premier from 1996-2004, has backed calls for the country to deal with its debt mountain, arguing in an interview with Sunday newspaper To Vima that a protracted austerity program may not work. A negotiated restructuring that would allow the country to rebuild its economy over the next 15 to 20 years would be better, he argued.

He's not the only one arguing for a so-called restructuring but the Greek government insists it is not on the agenda, as that would make it more difficult for the country to tap bond markets in the future.

The governor of Greece's central bank weighed in Monday, arguing that a restructuring is "unnecessary and undesirable." However, George Provopoulos said Monday that cost-cutting reforms by Greece's Socialist government were showing signs of "fatigue" and required a "powerful restart" to keep the program on track.

Whether Greece can actually withstand the pressure is another matter _ after all, it spent the early part of 2010 insisting it didn't need a bailout. By May, it had to accept a euro110 billion ($159 billion) package of rescue loans from its partners in the European Union and the International Monetary Fund.

"Despite public protestations to the contrary, the background chatter has reached such an intensity in recent days that the real questions now seem to be rather more when a Greek 'restructuring' will finally be announced and quite what the details will be rather than if there will be one at all," said Simon Derrick, a senior analyst at The Bank of New York Mellon.

Although a restructuring would reduce the debt pile and possibly bring a quicker end to the painful austerity measures, restructuring would not be easy and would entail huge costs to Greece's future ability to borrow money in the international markets as well as risking a massive blow to the country's banks, which are big holders of Greek bonds.

The costs would not just be felt in Greece though. Many German and French banks are also big holders of Greek debt too.

A Greek default could also trigger fears that others, notably Ireland or Portugal, may seek a similar way out from their debt stranglehold. There had been hopes that Europe had finally done enough to ringfence its three weakest members, but those nations' immediate economic prospects look bleak as they try to meet their obligations for the international financial support.

Portugal began its quest for financial assistance Monday with the finance minister of the country's caretaker government meeting delegations from the European Commission, the European Central Bank and the International Monetary Fund. A key topic of the discussions is expected to center on the interest rate charged for Portugal's expected euro80 billion ($116 billion) bailout.

Meanwhile, another European country is weighing on markets too _ but this one has no debt problems. News that a euroskeptic party made big gains in Finland's election Sunday has stoked fears that the EU's "comprehensive plan" to deal with the debt crisis may not run as smoothly as hoped.

The pro-EU conservative National Coalition Party may have topped Sunday's vote but the coalition it previously belonged to no longer has a parliamentary majority. As a result, the party is expected to begin difficult negotiations on forming a new government with at least one euroskeptic party.

The worry in the markets is that the Finns could derail the rescue plan for Portugal.

"The EU currently requires unanimous approval for each use of the eurozone bailout fund, so it is now being forced to examine ways to push through the Portuguese package without Finnish support," said Jane Foley, an analyst at Rabobank International. "There is no time to lose since Portugal is facing a hefty bond redemption in June."

Derek Gatopoulos in Athens and Daniel Woolls in Madrid contributed to this story.