Greece Bond Yields Surge On Heightened Fear
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Bond yields for the government in Greece jumped Tuesday as did the cost of insuring the country's debt, as concerns are mounting about the nation's domestic capital flight and its ability to stabilize its budget deficit without receiving help from the International Monetary Fund.
The yield on the 10-year government bonds in Greece are up 6.56 percent from the closing yield last Thursday to 7.1 percent, or 3.97 percentage points over the comparable German bunds.
The Greek stock market suffered as a result on Tuesday, as the nation’s ASE stock index dropped 2.2 percent in Athens during mid-afternoon movement.
The rising borrowing costs could eliminate spending cuts for Greece and the chances are increasing that the aid packages form the European Union and IMF could be initiated.
A standby aid package was confirmed by the EU and IMF last month for Greece as the country tries to correct its pubic finances. The IMF was included in the deal at the request of the EU, even though the monetary fund has a history of setting strict conditions for its aid.
The agreement to provide emergency aid to Greece by the EU and IMF was a stabilizing factor in the rapid decline.
Source form the Greek government said the nation will need to borrow 11.5 billion euro by the end of May, while the country has already sold 23 billion euro in bonds this year so far.
The government in Greece is implementing austerity measures to cut its budget deficit of 12.7 percent of the nation’s gross domestic product in 2009 to 3 percent in 2012.
Greek officials are concerned that the rising costs of borrowing could hamper other efforts the nation is making to rein in its debt.
The yield on the 10-year government bonds in Greece are up 6.56 percent from the closing yield last Thursday to 7.1 percent, or 3.97 percentage points over the comparable German bunds.
The Greek stock market suffered as a result on Tuesday, as the nation’s ASE stock index dropped 2.2 percent in Athens during mid-afternoon movement.
The rising borrowing costs could eliminate spending cuts for Greece and the chances are increasing that the aid packages form the European Union and IMF could be initiated.
A standby aid package was confirmed by the EU and IMF last month for Greece as the country tries to correct its pubic finances. The IMF was included in the deal at the request of the EU, even though the monetary fund has a history of setting strict conditions for its aid.
The agreement to provide emergency aid to Greece by the EU and IMF was a stabilizing factor in the rapid decline.
Source form the Greek government said the nation will need to borrow 11.5 billion euro by the end of May, while the country has already sold 23 billion euro in bonds this year so far.
The government in Greece is implementing austerity measures to cut its budget deficit of 12.7 percent of the nation’s gross domestic product in 2009 to 3 percent in 2012.
Greek officials are concerned that the rising costs of borrowing could hamper other efforts the nation is making to rein in its debt.
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