Market faith in Greece wabbles (but look at Ireland)
Buyers of a 5bn euro Greek bond on Monday sold off larger than expected quantities of the government paper yesterday, leading yields to rise from 5.9 percent to 6.3 percent, representing a 3.5 point spread with German bonds. The re-opening of a 12-year bond also fared poorly. Greek analysts said the poor sentiment was largely temporary.
Ireland faced more spectacularly bad news with the discovery that the country's banks faced a 32 billion euro cash shortfall, largely due to bad real estate loans- the equivalent of a fifth of the economy. The government could be liable to cough up 24bn of that, becoming the majority shareholder of every bank bar one.