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The interest rate on six-month bills worth 390 million euros which Greece issued today fell. It reached 4.64% and is 26 points lower than during the previous trade in January this year. According to Greek Public Debt Management Agency, bids of 1.36 million euros in total were made at the trade and the amount sought was covered 4.54 times. There was much lower interest to the January trade of six-month government securities and the coverage was 3.4%.

The trade was held by primary dealers and the transaction’s deadline is February 11, 2011. Accepted are offers up to the amounts involved and non-competitive bids amounting to 90 million euros. According to the rules on the activity of primary dealers, non-competitive transactions may reach 30% of the amount of the trade and the bids can be submitted until 12 o’clock on the evening of February 10, 2011. According to Petros Christodoulous, foreign investors have covered 80% of the amount received. There is a significant difference in the attitude of international investors because in the January trade of six-month government securities they constituted only 37% of investor’s interest.  

Meanwhile, after a short decline, the interest rate on ten-year Greek government bonds went up again. The spread of Greek bonds back increased to 800 basis points from 775 points on Monday. The insurance on Greek government bonds against a possible CDS bankruptcy which also rose by 55 points registered the same trend.

"It seems there are much more differences than we thought at first," said the analysis of Markit cited by Naftemporiki. Germany’s attempts to impose the rules contained in the Pact for competitiveness were not accepted as required by all members of the Union, analysts explained. This made capital markets doubt the success of the European support mechanism for and investors more cautious.

They assessed at Bruegel the expectations of the Greek government for the national economy development and recovery after the fiscal consolidation as unrealistic. To help the country reduce its foreign debt in the next 20 years to 60% of GDP compared to the 150% of GDP expected in 2011, the government should take more radical measures. They offered a 30% haircut of the current debt so as to overcome the debt crisis and to begin to restore the competitiveness of the country in the coming years.

It became clear while hammering the fate of the Greek state credit that the Greek deposits in Swiss banks reached 600 billion euros or that they are three times higher than the deposits in local banks. The data have become known after the agreement on information exchange between Greece and Switzerland. A publication of the magazine Der Spiegel cited by Imerisia said that local tax authorities did not know about the majority of Greek deposits in Swiss banks and their owners had "forgotten" to declare them.

The two countries will co-operate and establish a common control committee following the ratification of the arrangement for the information exchange in early 2012. After the cooperation becomes effective tax frauds will have to pay 10% tax on interest income and hefty fines.

In fact, if the truly wealthy in Greece kept their money in Swiss banks then the amount that ordinary Greeks withdrew from the Greek banks and deposited under the mattress last year was around eight billion euros. The deputy executive manager of Eurobank EFG in Greece estimated that most of the panic and mass withdrawal of deposits happened in early 2010 when Greece’s funding had not been supported yet by the Memorandum signed by the euro zone countries and the International Monetary Fund.

The situation had improved in the second half of 2010 but deposits were still considerably less. According to the banker, the reason for the decline was the serious recession and uncertain economic environment in the country.