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A new record high level of the interest rates on Greek government bonds compared with those of Germany was registered in the middle of the day - 1390 bps. Markets became even more anxious after the President of Eurogroup Jean-Claude Juncker has said that the European involvement has its limits, and the Commissioner for Economic Affairs of the EU Olli Rehn has admitted that the reforms in Greece have blocked.

Juncker even hinted at some kind of "soft" debt restructuring as a voluntary deferral of payments in the coming months, which made the markets bristle. Finally, the icing on the crisis cake was the statement of the President of the European Central Bank Jean-Claude Trichet, that if any restructuring or rescheduling of the Greek debt is made now the institution he represents would not accept bond guarantees from the country.
 
At the same time, the mess with the Greek recovery program and the enterprises for privatisation which do not want to be privatised, further collapsed the main indicator of the Athens Stock Exchange and it also dropped to 1307 points at noon. Most suffering have proved to be the shares of the telecommunication company OTE, 30% of which are still state-owned and the state Hellenic Petroleum. Both companies are included into the direct government privatisation plans as part of the strategy to accumulate funds to reduce the burden of the foreign debt.

Despite the big plans, little has been done so far to start the massive privatisation program. This inactivity really made nervous the supervising Troika and the international investors, which determine whether Greece will receive the 12 billion euros. This should be the fifth installment of the Memorandum of financial support of the 110 billion and it is expected to cover mainly the cost of paying old bond loans, maturing in the middle of the year.

Nobody in Greece should hope that it could get away without extra effort and without major privatisation revenues, said explicitly Juncker before the German edition Stuttgarter Zeitung, quoted by Vima. He stressed that those that constantly create obligations should be ready to face problems with the economic growth. Thus, Juncker made it clear that a country having a budget deficit of 10% of the GDP, as Greece, would first have to zero it before starting making upturn plans. Reducing the debt and forming primary budget deficits is crucial to enable Greece to develop on solid foundations in the future.

All agree that reforms in Greece are slowing down, the government is losing the momentum it gained after winning the mandate, and a possible debt restructuring now would have detrimental effects for local banks first, and then for the financial system in Europe. It seems that Greece would request new 60 billion euros from the International Monetary Fund, the European Central Bank and the European Commission to cover its needs for loans for the period 2012-2013. The confidence in the success of George Papandreou’s government is weakening, and Greek political analysts argue that no important bill for the strategic reform of the Greek economy has been passed in parliament in the last month and a half.

In addition to this whole picture, in which as if everything is going from bad to worse, an article was published in the Financial Times entitled The Greek Sinner Pays, quoted by Ethnos. It describes how Germany has gained so far at least 10 billion euros from the Greek crisis and the interest rate on subsidiary loans, and that the loss of confidence in the government bonds of Greece and other peripheral countries have raised the interest in the German government bonds. As a result, the interest rate on medium-term lending of Germany fell to 3.5% and the price of lending has dropped. German lawmakers have complained that they did not agree with any new aid and that they have reached their limit. However, only the Greeks have to pay higher taxes until now. Germany has not paid anything yet. Instead, it is already profitable, quoted the Greek edition the German Financial Times.