Greek, Portuguese bond yields spike to new highs

April 26, 2011 | 20:07

(0) user say

Yields on Greek and Portuguese government bonds spiked to new highs on Tuesday following the upward revision of the public deficits of the two troubled eurozone members.

The rate of return for investors on two-year Greek bonds rose to 23.237 per cent from 22.207 per cent at Friday's close while the yield on 10-year bonds climbed to 15.058 per cent from 14.718 per cent.

The EU's statistics agency Eurostat said Tuesday that Greece's public deficit in 2010 was 10.5 per cent of gross domestic product, higher than the 9.4 per cent forecast by the government and higher than the 8.1 per cent it had been targeting as part of its 110-billion-euro ($160-billion) EU-IMF bailout.

The deficit revision came amid market concerns that Greece will eventually have to restructure its debt, which Eurostat put at nearly 330 billion euros or 142.8 per cent of GDP, sent bond yield climbing.

Portuguese sovereigns came under similar pressure, with yields on two-year bonds rising to 11.386 per cent from 11.183 per cent, while the rate of return on 10-year bonds climbed to 15.058 per cent from 14.718 per cent.

On Saturday, Portugal's national statistics agency revised upwards its estimate of the country's public deficit to 9.1 per cent of GDP from 8.6 per cent announced earlier.

Earlier this month Lisbon finally threw in the towel and asked the EU and IMF for a bailout that is expected to total 80 billion euros as it scrambles to avoid a possible default in June.

AFP

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional