Germany readies surrender in fight to save Greece
Germany may be getting ready to give up on Greece, as measures in the credit markets signal growing concern about the smaller nation’s ability to repay investors. Yields on Greek two-year notes rose 1.93 percentage points to 57 percent on Sept. 9, according to data compiled by Bloomberg. Credit-default swaps to insure the country’s five- year bonds and to speculate on government securities jumped 475 basis points to a record 3,500 basis points, according to CMA. The contracts are the highest in the world and more than three times the 1,134 basis points on Portugal’s debt. After almost two years of fighting to contain the region’s debt crisis and providing the biggest share of three European bailouts, German Chancellor Angela Merkel is laying the groundwork for what markets say is almost a sure thing: a Greek default. “It feels like Germany is preparing itself for a debt default,” Jacques Cailloux said.“Fatigue is setting in. Germany could be a first mover or other countries could be preparing too.”
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