The risk of several euro countries is triggered by the purchase of German debt

  • Only Portugal and Italy escape the historical upswings that have marked countries like Spain, Belgium, France, Austria, Holland and Finland.
  • The EC believes that the situation that Spain is experiencing in the debt markets is not due to problems in its economy.
  • The keys to the debt crisis.
Bolsa española

Image of the interior of the Spanish Stock Exchange. Andrea Comas / REUTERS

Risk premia in Spain, Belgium, France, Austria and even the Netherlands and Finland on Tuesday recorded new highs since the introduction of the euro, by the willingness of investors to buy German debt .

Greece was not saved from the collapse either , so that practically only Portugal and Italy escaped the maximum, although in the case of the transalpine country, possibly due to the purchase of debt by the European Central Bank.

At 11.00 GMT, the yield on the German bond fell slightly to 1.75%, while interest on a large part of the debt of euro countries grew, thus expanding risk premiums.

 

Spain will not need any rescue These movements coincided with the publication by Eurostat, the Community statistics office, of the growth of EU GDP and the Eurozone for the third quarter.

The GDP of the eurozone and of the European Union (EU) as a whole grew by a shy 0.2% in the third quarter compared to the previous quarter and by 1.4% compared to the same period in 2010.

In the case of Spain, the differential with respect to the German debt exceeded 455 basis points , maximum levels, with the 10-year bond at 6.31% .

However, the Secretary of State for the European Union, Diego Lopez Garrido , said in Brussels that ” Spain will not need any ransom ” and attributed the punishment of the markets to political instability in Greece and Italy.

Also the European Commission (EC) considered this Tuesday that the situation that Spain lives in the debt markets is not due to problems in its economy .

“The pressure in the markets that affects a number of member states, not only Spain, is complex and is due to phenomena that are not only linked to the fundamentals of these economies,” said the spokesman for Economic Affairs of the EC, Amadeu Altafaj.

The political situation in Italy and Greece is not helping to calm the markets.

The situation in Greece and Italy is not helping the markets

Italy’s debt risk premium again surpassed the psychological barrier of the 500 basic points, touching the 510, despite the commission to Mario Monti to form Government after the resignation of Silvio Berlusconi.

Meanwhile, the yield on 10-year bonds stood at 6.8%, in a day in which political negotiation continued to form a government.

The Italian Prime Minister, Mario Monti, will end his round of consultations with meetings with the two largest political groups, the People of Freedom (PDL) and the Democratic Party (PD), trade unions and businessmen.

Later it is foreseen that Monti presents his Executive to the head of the State, Giorgio Napolitano.

Uncertainty in Greece

In Greece, uncertainty has arisen following the reservations of the conservative New Democracy to put in writing its commitment to the adjustment measures.

All Greek parties must sign the adjustment measures

The EC reminded Greece that the Eurogroup will only unblock the sixth tranche of aid of 8,000 million euros once the main political forces provide the European partners in writing their commitment to the adjustment measures and reforms in exchange for the international bailout.

In Belgium , the country risk was also breaking the record by standing above 300 basis points (304), since the 10-year debt was 4.79% in the secondary market.

The yield of the 10-year French bond rose to 3.58% and with it the differential reached 183 basis points, slightly above that of Austria, which was at 181 basis points , as its bond yielded 3.56%.

The attitude of the investors caused that even the yields of the Finnish and Dutch debts went up to be placed at 2.46 and 2.38%, respectively. These interests, compared with 1.75% of the German bond, also led to risk premiums in the maximum area.

In the case of Finland, its spread was 70 basis points and in the Netherlands, 63 basis points.

Equity markets also suffered tensions with declines that, at 11.15 GMT, reached 2.77% in Milan, 1.99% in Frankfurt, 1.85% in Paris, and 1.05% in London.

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