Top hedge fund manager John Paulson thinks the European debt crisis is going to worsen, thanks to continuing problems in Spain.

“Mr. Paulson told investors in a call on Monday that he was betting against the creditworthiness of Germany,” the Financial Times reports, “regarded in markets as among the safest sovereign borrowers, because he saw the problems affecting the eurozone deteriorating severely, said a person familiar with Mr Paulson’s strategy.”

Paulson believes that problems in Spain will spill over and threaten the eurozone’s stability, Financial Times reports. It notes that Paulson’s position includes holdings of credit default swaps written on German debt, and has been in place for several months.