How far interest rates will climb Greek? They have reached record levels on Wednesday, the highest since the entry of Greece into the euro zone in 2001. By mid-afternoon, the yield (rate) of the obligation Greek 10 years was 7.096%, 6.976% against the previous day. They even reached 7.176% to 12.30.
Yields move away so the Greek benchmark, the German Bund, the gap between the two is widening to 400 bps (4 points). At the same time, the cost of insuring the debt of Greece, which evolves according to the rate, found levels of February, 400 points mid-afternoon, according to Markit surveys.
The weakening euro
Leaded by the Greek distrust of debt, the euro fell as well. Around 13:30 it was trading at 1.3346 to the dollar, after falling to 1.3326 dollars one hour earlier.Reached a floor more since the announcement of a plan of European aid for Greece, on March 26 last.
The markets react since Tuesday in part to a report released that day lending to Greek leaders intend to negotiate the terms of any financial assistance from the EU and IMF. Despite an immediate denial from the authorities of countries, markets have overreacted to information.
IMF teams arrived Wednesday morning in Athens to provide technical assistance to redress public finances. Their mission will last two weeks. The budget deficit, also revised upward, to reach 13% of the GDP against 12.7% of the initial estimate used as the basis for projections of the annual budget fast cash advance.But news of Greek economic, fiscal deficit for 2009 is revised upwards and could reach 13.5% or 14.3%, according to the newspaper Naftemboriki.
Economic forecast not reassuring
This renewed tension on the market does not bode well for the country that has yet to find 20 billion euros by the end of May to repay debt is estimated at 300 billion euros, or 113% of GDP. Macroeconomic statistics are not reassuring either. According to the European Commission, the economy needs to contract by 2.5% against 2% initially estimated.
Asian investors, including Chinese and Japanese funds, show little enthusiasm for the idea of buying Greek bonds. George Papaconstantinou, which announced its intention to borrow dollars, must travel to the United States after April 20 to find new potential buyers.
In this context, Greek banks, whose notes have been degraded in recent weeks and who face capital flight, have requested further financial assistance to the government. They want to benefit from funds remaining from the support plan, or about 17 billion euros, said the Greek finance ministry.
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