The IMF no. 3 official said yesterday that European officials have to do more to lower the status of skepticism regarding the region's ability to contain the European sovereign debt crisis.

He said However, if the European sovereign debt problems were to become bigger, we need to keep in mind that that could bring about considerable downside risks.

We have seen this week a rise in bond yields and cost of insuring against default to record high while the euro fell last week to four-month low against he dollar due to lack of confidence, ahead of the European Finance Minister's meeting next week where they will discuss the possibility of expanding the European rescue fund amid opposition from Germany.