04 yesterday between on the maturity 10 years

The Greece will be at the heart of the concerns of the Board of Governors of the European Central Bank (ECB) today. One of the main topics of the meeting will focus on the assessment rules of assets accepted as collateral to the ECB refinancing operations, after Jean-Claude Trichet, President of the institution, made a gesture to avoid that the Greek State bonds become ineligible next year.

The rate to 10 years in the Greece peaked yesterday since 2001, 7.18 at the top of the meeting. An "as is current, Greek debt is advantage over other sovereign bonds in the euro area", it said at BNP Paribas. The ECB applies indeed the same treatment to Greek and German papers despite 4.04 (yesterday) between, on the maturity 10 years. The risk premium - which measures earnings surplus that the Greece has to offer to investors compared to the Germany - thus evolves on its highest levels since the creation of the euro. On maturity at two years, reflecting the vision of the market in the short term, the rate differential is even more impressive: it was 5.65 yesterday. Finally, the risk attached to Greek debt, measured by the price of CDS (credit default swap"), climbs: according to CMA DataVision, it stood yesterday 410 basis points, close to the record of 427 points registered in February, and the CDS of the Iceland for the first time.

The market thus pushes the cost of financing of the Greece increasingly unsustainable levels. Athens has yet to find funds to cover its needs in the month of May and provides for the moment to lift the debt on the American market. But a continuation of the rate hikes may force the Government to give up to appeal to markets and to turn to the European Union and the international monetary Fund (IMF), under the terms of the agreement reached late March. Yesterday, the Prime Minister also expressed his support for the aid plan, seeking to silence the rumours which caused the recent escalation of tension. "This agreement is really very good for our country and for the European Union", said Georges Papandreou, who saw a "safety net". According to him, the agreement "to give a successful outcome to the crisis of credibility". The day before, the Minister of finance had denied wanting to renegotiate the terms of the assistance plan, some have found to be too severe.

Minority support

Investors are beginning to prepare for use of the contingency plan. The team of Barclays Capital estimated that Athens could get a little less of 20 billion of the IMF, which would bring a minority support, according to the wishes of the Eurogroup. "The average rate of a loan from the Fund and the European Union would in any event less expensive than financing market", adds the strategists of RBS. They are not, moreover, that the Greece bought soon bond State in circulation including the maturity date is May 19. A gesture of this nature could be a little falling agitation, especially as the Greek bond market is a little liquid and therefore relatively easy to fly.

Another sign of the growing concern, the credit market was assigned yesterday, especially the compartment of the banks, who hold Greek debt. The index of CDS on the financial institutions was 15 basis points above the index of European companies. A record. Conversely, American State bonds were sought: the issuance of debt in 10 years has been over-subscribed.