THE TELEGRAPH: Fleeting relief over the EU-IMF bail-out for Greece has given way rapidly to a fresh bout of investor panic across southern Europe, pulling the euro down to its lowest level against the dollar in over a year.
Yields on German two-year debt reached a record low, falling to 0.71pc on safe-haven demand in echoes of credit stress at the height of the financial crisis. This is below the European Central Bank's short-term rate of 1pc. "This is very unusual and indicates concern about systemic risk from sovereign debt," said Stephen Lewis from Monument Securities.
German Chancellor Angela Merkel told ARD television that banks and creditors should be forced to share the pain if further rescues are ever needed, suggesting "an orderly restructuring" of debt in future.
The words were an icy warning to investors that the €110bn (£95bn) aid package for Greece is a one-off case. Banks, insurers, and pension funds with high exposure to Club Med debt cannot count on a second rescue to protect their portfolios if the crisis spreads. >>> Ambrose Evans-Pritchard, International Business Editor | Tuesday, May 04, 2010
