Investors Worried The Greek Government Bonds

By Author: Italo Zanotti
Total Articles: 62
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Sudden acceleration of the crisis in Greece, about a month from the announcement of IMF-EU rescue plan. The Black Thursday in Athens has begun in Brussels, where in the morning Eurostat, the EU statistical office, has launched a new alarm on the deficit in 2009 was higher than expected, reaching 13.6%, and it is not not deteriorate further.
The response of the markets was swift: the rates on government securities and Greek spreads with the German bund have record levels, never so high in the euro entry in Athens. And Moody's has decided to lower the rating from A2 to A3 of the Greek country, threatening further cuts.
Even the credit default swap debt five years in Portugal, which measure the betting market on the risk of insolvency of Lisbon, yesterday reached a new historic high of 248 basis points. On tensions related to debt are also rising greek also similar contracts of Spain, now at 166 points.
Prime Minister George Papandreou has summed up the drama of the day: "We're in a national emergency," he said during an extraordinary meeting of the Government, urging everyone to "not panic" and to "not lose your ...
... head."
Also because the social alarm grows by the day. Yesterday was the turn of civil servants marched in thousands to the streets of the capital (the demonstrations have resulted in clashes with security forces) to protest the plan 'blood and tears' imposed by the Government, and the risk of further cuts agreed under pressure from the EU and IMF, whose representatives, along with those of the ECB, at this time is engaged in technical talks in Athens, to decide the measures that Greece must prepare to receive any aid by 2012.
Meanwhile, also in the Greek capital, to give a sense of emergency has also circulated the idea - but unconfirmed - of a possible "bridge loan" to activate in the short term, before you start the car license plate EU-aid IMF .
The deepening crisis arises therefore from a government deficit which at Eurostat in 2009 was worse than indicated by Athens, not 12.9% but 13.6%. And to make matters worse, the European statistical office said could be further upward revision - between 0.3% and 0.5% - due to the uncertainty that weighs on some items, including some swaps traded outside the stock exchange official circuits.
For this reason the EU Commission, while confirming that the target for 2010 is to cut the deficit by 4%, on the other urged Athens not only to give "full and effective implementation of consolidation measures decided on this year, "but - said EU Commissioner for Economic and Monetary Affairs Commissioner Olli Rehn -" to urgently step up the preparation of structural reforms and further steps for the coming years, namely 2011 and 2012. Year, the latter, by which the deficit should be below 3%. Following the new Eurostat data, the performance bonus that the ten-year Greek bonds must offer than the German bund was flown to 600 basis points, a difference of six percentage points not seen since February 1998.
Even further surge in yields on short-term bonds, with those two years rose by 292 points. The risk of default on the debt of Greece then flew to a new record, reaching 744 points and jumped over 100 points on Wednesday than one year maturity.
Meanwhile, the euro sank, falling to the lowest since May 2009, under $ 1.33 share, and the Athens Stock Exchange lost 3.91% on closing down well below the critical threshold of 1900 points, to 1860.76.
Based on Moody's difficult situation in the country decided to lower the rating of Greece to the level of A3 from A2. The rating agency maintained its rating greek under observation "for a possible further cut," since "there is a significant risk that the debt can only be stabilized at a level higher, and more expensive, than previously assumed" . Moody's is not the only institution to advance doubts about the country's financial estate. Indeed, despite the EU aid goes to Greece a likely debt restructuring, which will reduce or delay payments to underwriters of its securities. It includes Goldman Sachs, whose chief analyst for Europe Erik Nielsen invites investors to "look carefully to the signals in the coming months, by which Athens could propose a voluntary restructuring.
Moreover, the EU has also revised upwards the deficit in 2009 Ireland. According to Eurostat figures this last year stood at 14.3 percent, up from 11, 7 per cent notified by the Government. To weigh the 4 billion allocated for the rescue of Anglo Irish Bank.
Civil servants are on strike in Greece entered yesterday for the fourth time this year, against the austerity plan that their union Adedy, denounced as the tool of "the greatest assault on our rights since the fall of the junta," the colonels .
Photo: Erik Nielsen
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