In July-September 2011 the stock markets were again shaken at international level. The crisis has become deeper in the EU, particularly with respect to debts. The CADTM interviewed Eric Toussaint about various facets of this new stage in the crisis.

Part 1: Greece

CADTM: Is it really true that Greece has to commit to paying about 15% interest rates to be allowed to contract ten year loans?

Eric Toussaint: Yes, it is; markets are only ready to buy the ten-year bonds Greece wishes to issue on condition it commits to paying such extravagant rates.

CADTM: Will Greece contract ten-year loans on such conditions?

Eric Toussaint: No, Greece cannot afford to pay such high interest rates. It would cost the country far too much. Yet almost every day we can read in both mainstream and alternative media (the latter being essential to develop a critical opinion) that Greece must borrow at 15% or more.

In fact, since the crisis broke out in spring 2010, Greece has borrowed on the markets for 3 months, 6 months or 1 year, no more, at interest rates ranging between 4 and 5%Note that before speculative attacks against Greece started, it could borrow at very low rates since bankers and institutional investors (pension funds, insurance companies) were eager to lend.

For instance, on 13 October 2009, it issued three month Treasury bonds also called T-Bills with a very low yield of 0.35%. On the same day it issued six month bonds at a 0.59% rate. Seven days later, on 20 October 2009, it issued one year bonds at 0.94%This was less than six months before the Greek crisis broke out. More