Since all the E.U. countries have debt denominated in Euros, differences in rates are due to different risks of default (and possibly tax law differences or national loyalty).
While the rest of Europe has 10 year bonds from about 2-4%, Greek’s 10 year bonds hit 11% today. Without mentioning a country, an analyst at Morgan Stanley who used to work for Moody’s is warning of inevitable default of government debt.
Switzerland did not join the E.U. and still maintains its own currency. The 10 year Swiss Franc bond has a yield of 1.05%. The Swiss currency has gained about 12% over the Euro this year.
Greek ducked a previous default in May by a bailout “loan” from Germany and the European Central Bank. In the past day, Slovakia says it isn’t going to provide its “share” of the Greek Bailout.
