Greek 10 Year Bond

Greek 10 Year Bond

A government bond is a bond issued by a national government that is paid on face value at maturity date, with periodic interest payments in – between. It is also sometimes called sovereign bond. Due to the economic recession of 2008, Greece faced the risk of defaulting, as among other problems, the maturity date of the Greek government bonds was imminent, with the government being unable to meet its debt obligations. A crisis of confidence followed, causing a widening of bond yield spreads. There was also fear that a series of country defaults would follow within the European Monetary Union, as other governments also seemed unable to repay their debts. To avert the worst – case scenario, the Eurozone countries and the International Monetary Fund agreed on a bailout loan for Greece, as long as the government would agree on a series of reformation steps that would strengthen the Greek economy. In the years that followed, Greece was and still is on the verge of economic disaster; a reformation on the public sector is currently under way and a number of new laws implementing spending cuts has been passed. Unfortunately, this has resulted in many other problems, including the triggering of a humanitarian crisis.