The Cause of High European Borrowing Costs

ome time ago we heard the news that Greece was a high debt. Who would have thought that was soaring cost of borrowing in the European bond market triggered by the agreement of the European Union Summit Greek-related cases who can not afford to pay the debt. The evidence suggests that the effect is felt when a sale of new bonds Spain, Italy, and several other European countries.

Don Quigley, an analyst at your portfolio Artio Total Return Bond Fund, said that they had to sell, and related to differences of opinion regarding the courses credit-default swaps (CDS). This program has made a rising risk of default since the EU imposed an agreement. On 26 October, bonds Belgium, France, Portugal, and Spain experienced a significant increase, as reported by the site marketwatch.com.

What we need to know is that at the EU Summit in October, the European Union and international banks agreed to cut Greek debt bonds. Greek bonds are trimming debt to fifty percent. And, these events affect each other expensive European loans today, and probably next year.