Here's how little confidence the global bond market has in the ability of Greece to avoid default: In order to sell two-year bonds, Athens must now offer its lenders 60 percent.
It is no wonder that more and more German officials, among others, fully expect Greece to default on its national debt. They are turning their attention to protecting German banks, which hold a significant amount of Greek debt, in the increasingly likely event of a default.
The 60 percent interest rate is only the latest evidence in the now-two-year Greek debacle that has exposed rifts among European leaders and institutions about how to handle members of the euro zone that won't live within their means. Some leaders want more monetary and fiscal integration and are pushing for the issuance of so-called euro bonds. Such a tactic, endorsed by France and Belgium, would spread all risks and all rewards among all members of the euro zone.
Other officials, including many from Finland and Slovakia, want either substantial collateral from Greece for more loans or else want Greece to just leave the euro zone before its troubles drag down the euro to new lows.
Now it appears that Germany may be tilting in the direction of Slovakia and Finland. Aides to German Chancellor Angela Merkel are signaling that Greece may need to leave the euro zone.
"It feels like Germany is preparing itself for a debt default," Jacques Cailloux, chief European economist at Royal Bank of Scotland Group Plc in London, told Bloomberg. "Fatigue is setting in. Germany could be a first mover or other countries could be preparing too."
As Europe's strongest economy, its support for any bailout of Greece is essential.
"The situation is very serious, more than some had thought," conservative parliamentary floor leader Peter Altmaier, who is from the Christian Democratic Union, told Reuters.
"Exclusion from the euro zone is not legally possible at the moment," he said. "That means the Greeks must decide themselves if they stay in the euro zone or if an exit is better for them."
The sky-high level of Greek interest rates coincides with European stock markets hitting a 26-month low, with French bank stocks leading the plunge.