Eurozone in bond record as Greeks suffer

Borrowing by eurozone governments from the bond markets has topped a record €110bn (£96bn) so far this year, raising deficit costs for weaker European nations with high debt levels like Greece.

Investors warn that the yields they will demand to lend to Greece and other economies, such as Portugal, Spain, Ireland and Italy, will continue rising until they are convinced they are prepared to tackle their debts.

The remarks come as a key economic indicator showed Greece’s factory sector shrinking in January.
However, the Greek government insisted it would keep its borrowing programme on track in spite of concerns in financial markets, which saw bond yields hit 10-year highs last week.

The European Commission is due to publish recommendations tomorrow on Greece’s plan to slash a double-digit budget deficit and restore investor confidence.

EU’s economic affairs commissioner Joaquin Almunia said: “What we are saying to the Greek authorities is: your stability programme has established ambitious targets and objectives and we fully endorse these ambitious objectives.”