Greek bond yields jump as debt relief is put on hold

Greek bond yields jump as debt relief is put on hold

Greek government borrowing costs rose to one-month highs on Wednesday after the eurozone’s bailout fund said it had put short-term debt relief measures for the country on hold.

The European Stability Mechanism said it had suspended the measures designed to cut Greece’s public debt after the government proposed to make a one-off payout to pensioners in December.

Greek 10-year government bond yields rose 45 basis points to a one-month high of 7.30 percent, while five-year yields rose 40 bps to 8.19 percent, also a one-month high, according to Tradeweb data.

“The news has added to some pressure on Greek government bonds but I would see this as part of the ongoing negotiations between Greece and its creditors,” said DZ Bank bond strategist Christian Lenk.

“At the end of the day, we will see short-term debt relief measures. This is just a way for the ESM and the troika to make sure the Greeks comply with everything they have to do,” Natixis strategist Cyril Regnat said.


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