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After the Black Monday on the Athens Stock Exchange there follows a Black Tuesday. Its index fell another 1.9% and reached the unenviable 979.25 points – the lowest in decades. The Greek spread-index of 10-year government bonds has remained dramatically high – 1313.8 basis points, which in fact isolates the country from the international capital markets.

In such an uncertain internal environment and hazardous situation on the world markets, the Greek Public Debt Management Agency held today an auction for 6-month bills and managed to take a € 812.5 million short-term loan the interest rate being 4.85%. This value is slightly lower compared with the previous auction held on June 12 when the interest rate was 4.9%. Foreign investors bought only 25% of the offered bills and local investors acquired the other 75%. In June, foreign investors had bought an even smaller share of the bills – 22%.

The today's auction of bills was extraordinary and driven by Greece’s urgent need of cash despite the payment of the fifth tranche of the aid from the European Union, the European Central Bank and the International Monetary Fund. As GRReporter already announced, Greece is unable to comply with the budget deficit set in the financial stabilization program and is constantly exceeding it. This raises the need for additional funding. Actually, the Greek Public Debt Management Agency had announced that there would be no auctions in August and December. The maturity of the 3-month bills issued in May worth € 2 billion is in August and of the 5-year bonds worth € 5.9 billion is on August 20.

In an interview with radio Europe 1, the President of the European Central Bank Jean-Claude Trichet urged European leaders to take urgent measures to reduce the deficit of the states they govern. Asked whether the European Central Bank would buy bonds directly from the countries with debt problems Trichet said, "We could not do that. We are a secondary market and we will stay there." In an article for the German edition of Financial Times, the Nobel laureate Nouriel Roubini urged the European Central Bank to make the interest rate on the continent zero in an attempt to revive its markets.

Further details are coming