Greece's borrowing costs jump
By Elena Becatoros |
March 31, 2010, Wednesday
|
Print Edition
Print Edition
MARKETS drove up Greece's borrowing costs again yesterday despite last week's promise of a financial backstop from other eurozone countries, indicating the country's debt crisis is far from over.
Greece tapped another 390 million euros (US$524 million) from bond markets yesterday by re-opening - or selling more of - an existing, 20-year bond. But its success in raising money from bond sales was darkened by the continuing high interest rates markets are demanding to hold Greek debt.
The interest rate gap, or spread, between Greek 10-year bonds and equivalent German issues - considered a benchmark of solidity - rose back to above 3.35 percentage points yesterday, about the same as before the rescue plan's announcement last Thursday and up from the 3.06 percentage points on Monday.
That means Greece is paying roughly twice in interest what Germany must to borrow, despite the promised backstop from eurozone governments.
Athens hopes the rescue plan - in which the 16 eurozone countries promised loans together with funding from the International Monetary Fund to assist Greece if it is unable to borrow or pay its debts - will help restore market confidence and bring down the spreads.
Greece tapped another 390 million euros (US$524 million) from bond markets yesterday by re-opening - or selling more of - an existing, 20-year bond. But its success in raising money from bond sales was darkened by the continuing high interest rates markets are demanding to hold Greek debt.
The interest rate gap, or spread, between Greek 10-year bonds and equivalent German issues - considered a benchmark of solidity - rose back to above 3.35 percentage points yesterday, about the same as before the rescue plan's announcement last Thursday and up from the 3.06 percentage points on Monday.
That means Greece is paying roughly twice in interest what Germany must to borrow, despite the promised backstop from eurozone governments.
Athens hopes the rescue plan - in which the 16 eurozone countries promised loans together with funding from the International Monetary Fund to assist Greece if it is unable to borrow or pay its debts - will help restore market confidence and bring down the spreads.
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