Financial Times
April 14, 2011
Greek borrowing costs reached a euro-era high compared with those of Germany. The euro tumbled on Thursday and premiums charged on Greek debt over Germany’s hit euro-era highs after the countries’ respective finance ministers talked of Greece needing more time to attract investors and raised the prospect of debt restructuring.
George Papaconstantinou told the Financial Times that Greece needed more time to convince international investors of its commitment to reform its finances.
Separately, Wolfgang Schäuble, Germany’s finance minister, told Die Welt newspaper that, if a study already under way showed that Greece’s debt levels were unsustainable, “further measures” would have to be taken.
When asked what those could be, he ruled out any involuntary restructuring before 2013, but warned that investors could face losses after that point.
The remarks were enough to reverse a recent rally in eurozone sovereign debt. “Greek bonds are getting crushed,” said Gary Jenkins, head of fixed income at Evolution Securities.
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