Can they make it?

9 September 2010 By Ian Campbell

Yields on Irish and Portuguese debt are hitting records in the life of the euro zone while Greek yields remain in the stratosphere. The problem is not just debt but competitiveness and growth. Especially in Portugal and Greece the current signs are not encouraging.

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The yield on 10year Irish government bonds closed at 5.99 percent on Wednesday having earlier risen as high as 6.05 percent, its highest level during the life of the euro. The Irish government announced during the day that it would split the troubled Anglo Irish Bank into two separate entities, a funding bank and an asset recovery unit. Brian Lenihan, the finance minister, said on Sept. 9 that the final cost of winding down the bank would be known "within weeks".

Greece reported that its GDP contracted by 1.8 percent in the April to June quarter from the previous quarter. The fall compared with a year earlier was of 3.7 percent. Exports fell by 4.6 percent compared to the January to March quarter and by 5 percent compared with a year earlier.

Portugal's Public Debt Management Agency reported that it sold 378 million euros in 11year bonds and 661 million euros in 3year bonds. The average interest yield on the 11year bonds was 5.97 percent. The yield on the 3year bond was 4.09 percent.

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