Is the crisis of the euro nearly over?

Tribune by Guy Verhofstadt, President of ALDE Group at the European Parliament and member Notre Europe Committee.

Last Monday, the Greek Treasury successfully raised five billion euro in seven-year bonds. Demand practically exceeded supply. Does this mean the Greek tragedy is over? Is the eurozone no longer at risk? That at least was the objective of the European heads of state and government for the European summit last week. A new mechanism was created that combines IMF payments with bilateral loans from the eurozone to help Greece if deemed necessary.

The financial markets did not seem to be very impressed. Standard & Poor’s, the world’s leading rating agency, for example decided not to alter the rating of the Greek government bonds despite the conclusions of the Council and the stock market barely brightened. Even though the Greek bonds that were issued this week sold like hot cakes, the interest the Greeks will have to pay, remains sky high, three hundred basis points more than the reference rate on the market, and more than double the interest set by the German Treasury. In short, the premium yield that investors are demanding for the Greek bonds has not decreased.