This week's sale of Greek debt has gone unequivocally well; with pension funds and insurance companies alike lapping up the chance to secure 10 year bonds at a mouth-watering 6.35% yield. Compare that with Spain's similar 5 year offering yesterday which went for 3% and the fact that this yield represents a hefty 295 basis points more than comparable German debt, and it's clear to see why investors oversubscribed by more than three times the face value of the offer (EUR16bn in bids for only EUR5bn on offer). But what is also clear is that Greece have had to pay up significantly on this chunk of debt (0.32% over their existing debt) and for a country needing to roll around EUR53bn in debt this year, it is certainly not yet the time to cheer the end of the crisis. Much has been made of the heroic extent of austerity measures proposed and how tremendously difficult it will be for Greece to live up to such promises over such a long time horizon. Some of the more frivolous media suggestions have extended to the idea of Greece selling some of its islands in order to plug the debt hole. But the fact is that Greece's gluttony and lack of fiscal discipline during the boom years has now reached a juncture where a one off crash diet is not going to do the trick. For its long-term survival within the Eurozone, Greece needs to make lasting structural reforms to meet the demands of keeping up with the rest of the Euro area.   The German government has been quick to stress all week that today's scheduled meeting between Merkel and Papandreou will not precipitate in any offer of aid from Germany to Greece. Germany's Economics Minister went even further today; underlining the point that each EU country has to take care of its own affairs putting, and putting in no uncertain terms that the German government would not be offering Greece even one cent. One can't help but think that the harsh tone of these comments is tinged by soured relations related to Greece's ill-thought out dredging up of Nazi grievances in recent weeks. Greece is facing a difficult transition of cold turkey ahead, and if Germany is any example to go by, it cannot expect much sympathy from its bigger Eurozone siblings.
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