Unease as Greek, Portuguese bond rates spike

11 February 2016
445 Views

The financial market turmoil is drawing attention back to the ability of a number of countries that use the euro currency to pay their debts.

On Thursday, in a sign that investors are getting somewhat worried again, the interest rate on Greece’s 10-year bond rose 0.35 percentage point to 11.32 percent. Greece is already in a bailout program – meaning it does not have to tap bond markets to finance itself – so that increase may not matter too much in the short term.

For Portugal, where the rate has spiked 0.81 percentage point to 4.33 percent, it may be more of a concern. Portugal is no longer in a bailout program so has to meet payments through its own devices.

The rise in borrowing costs will put a spotlight on the new Portuguese government, which is rolling back a series of budget austerity cuts.

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