Jean-Claude Juncker, who heads the group of euro-area finance ministers, said he hopes Greece’s latest austerity measures will be enough to calm markets, as Greek government debt outperformed eurozone benchmark paper. While Greece’s fiscal crisis is «worrying,» the plans are «solid,» Juncker told reporters in Luxembourg yesterday after a meeting with Prime Minister George Papandreou. «I can only hope that financial markets also take into consideration» the plan and that it «stops all irrational movements.» Greek bond yields have soared since early December on concern that the nation won’t be able to make its debt payments, while the euro has declined as investors fretted about the impact of the crisis on other nations. Greek bonds have risen in the last two weeks after the government pledged tougher action to tackle the budget gap. If markets don’t acknowledge the Greek steps, euro-area governments «stand ready to take all measures that would be necessary to guarantee the financial stability» of the region, Juncker said. He also said he doesn’t expect the euro region will need to take any steps beyond this pledge «because the Greek consolidation program is credible enough.» Greece’s 10-year 5-billion-euro bond issue on Thursday earned a warm reception from investors yesterday as the yield spread over benchmark German bunds tightened. «We’re seeing some secondary market performance, which is all constructive, but it’s still early days… we’re normalizing but there’s still a huge distance to go,» Harvinder Sian, rate strategist at Royal Bank of Scotland, told Reuters. The last time Greece issued debt, at a syndicated sale in late January, uncertainty on the market sparked selling that pushed bond yield spreads against German Bunds wider, causing similar moves in peer peripherals Portugal and Spain. The Greek/German 10-year bond yield spread narrowed to 289 basis points from 299 at Thursday’s European settlement close. Bookrunners said foreign investors snapped up 77 percent of Greece’s 10-year issue, which attracted around 16 billion euros in bids, with the UK and Germany purchasing the largest share of the bond. Credit-default swaps insuring Greek government debt rose 2.5 basis points yesterday to 309, according to CMA DataVision prices. That means it costs $309,000 a year to protect against default on $10 million of the government’s debt for five years. The contracts have tumbled from 400 basis points in the past week. ‘Time for EU to act on Greece’ Finance Minister Giorgos Papaconstantinou said the government won’t need to make more budget cuts to meet its deficit reduction goals and it’s time for European Union allies to take concrete steps to aid Greece. «Obviously, the EU must undertake responsibility, which it hasn’t done yet,» the minister told Parliament, which prepared to vote on 4.8 billion euros of additional deficit-cutting measures the government announced earlier this week. The Greek minister’s comments come a day after EU Economic and Monetary Affairs Commissioner Olli Rehn said the measures are enough for 2010 but further measures will be needed in 2011 and 2012. The eurozone is ready if necessary to take coordinated measures to guarantee its stability, Rehn was cited as saying in an interview with an Italian newspaper. Meanwhile, Bloomberg reported yesterday that European Union nations are working on a contingency rescue plan for Greece to be funded by European governments, according to two people briefed in Berlin yesterday by an EU official.