Debt Talks Pressure Greek Bonds

Wall Street Journal
May 30, 2011

Greek government bonds were under pressure again Monday, with two-year Greek yield spreads over German paper widening as speculation on solutions to Greece's debt crisis intensified.

The latest bout of pressure on Greek debt comes after reports emerged over the weekend that a plan to increase external intervention on Greek tax collection and privatization is gaining ground.

Separately, Swedish Finance Minister Anders Borg told Germany's Die Welt that there can be no talk of extending Greek debt maturity until the country achieves a budget surplus.

Greek two-year spreads over corresponding German treasury notes, or schatz, were up 0.114 basis points at 23.168 percentage points by late morning in Europe. Further down the curve, Italian and Spanish yield spreads have widened more than Greek yield spreads as Italy and Spain are set to sell government bonds Monday and Thursday, respectively.

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