This chart (courtesy of Fullermoney) of the Greek 10yr bond yield tells you all you need to know about the fortunes of Hellenic debt. Before the last bailout announcement, the fourth, the yield briefly touched 7.5%, hit 6.5% on the “good” news but is now approaching 8%.
Rumours abound of a contrived “default” that would allow a reduction in the amount of outstanding bonds that would not trigger a payment to those who have bought CDS “insurance”. The main German opposition party has said they will not support the bailout that requires parliamentary approval, so the deal is as good as dead. This is perhaps why the IMF has started talking up a fund raising campaign as they may well be the banker of last resort.
Thus far the Eurozone governments have shown insufficient aptitude to run a whelk stall, on this issue and many others, and Nick Clegg is likely get a hard time on Thursday’s debate trying to defend the Lib Dems pro-European credentials. Cameron has gone out of his way to avoid making the election a “euro” issue, but it may turn out to be his trump card. Kenneth Clarke (leader of the Conservative pro-Europe wing) has weighed in with a comment that a hung parliament might lead to a visitation from the IMF and Cameron will want to distance himself from the “old” Tory brigade. This campaign has two debates to go and some considerable distance to run!