Greece hammered by the markets

Constantin Gurdgiev interprets the 2 year Greek bond yields –

This is it, folks. No where else to run. Greek interest on public debt would swallow over 19 percent of their GDP annually!

Ouch!

FWIW, that is almost half what a normal country would take in tax revenues, being used to meet unproductive interest payments..

In The Telegraph Ambrose Evans-Pritchard argues that the ECB will have to intervene soon and begin purchasing sovereign government debt.

The European Central Bank may soon have to invoke emergency powers to prevent the disintegration of southern European bond markets, with ominous signs of investor flight from Spain and Italy.
…
The issue of the ECB buying bonds is a political minefield. Any such action would inevitably be viewed in Germany as a form of printing money to bail out Club Med debtors, and the start of a slippery slope towards in an “inflation union”.

But the ECB may no longer have any choice. There is a growing view that nothing short of a monetary blitz — or “shock and awe” on the bonds markets — can halt the spiral under way.

Bloomberg quote an estimate of €600 billion to bailout Greece, Portugal, Spain and Ireland.