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The Greek 10-year bonds’ spreads reached a new historic height of 1,324 basis points before settling at 1288 bps at the end of the day. The reasons are the constant talks that the government of George Papandreou would announce some form of suspension of debt payments the next few days. The spreads of the other troubled countries in the euro area also rose but did not reach the heights of the Greek indicator. The CDS insurance against the failure of the 5-year Treasury bonds grew during the day and passed 1500 bps, but closed at 1497 bps.

The tension of the international markets reached the Athens Stock Exchange the index of which lost 1.79% of its value in a day and closed a little over 1400 points. All sectors of the economy suffered losses with the exception of health care and chemical industry. As expected, the banking sector suffered large losses - the shares of the local financial institutions fell by an average of 3.59%.

In conditions of extreme financial instability, Mohammed El Erian - the CEO of Pimco, the largest investment fund in the world - has stated that Greece should proceed to restructure its debt because it is far from the objectives of financial stability. We have not seen the result of any of the programs of economic recovery of Greece, wrote he in the newspaper Handelsblatt and warned that Greece had already lost 10 years. According to Mohammed El Erian, the efforts of the International Monetary Fund, the European Central Bank and the European Commission to save Greece had failed and the country should proceed to urgent reforms. According to Pimco’s CEO, the reforms had no results and will not have results.

At the same time, the Director of the Greek Institute for Industrial Research Yannis Stournaras acknowledged that any debt restructuring would be disastrous for the Greek banks and insurance funds. He said that the state of Greece is better than last year as many reforms have been made in 2010. The economist, however, found a reform fatigue and characterized the privatisation program of the Greek government as "not so brave as expected." The Institute estimates show that the Greek state owns companies and property worth 280 billion euros. A privatisation of 50 billion of them is not only possible but also would significantly reduce the country's debt as a percentage of the GDP.

"The difficult child of Europe can not fulfill its promises," this is the comment of the German magazine Der Spiegel on the yesterday's announcement of the state of the Greek economy in 2010 by Eurostat. The German edition of the Financial Times stated on the same occasion that the gap in the Greek public finances is larger than expected. Greece is not running a marathon, but is sailing in an odyssey that nobody knows where would take it, is the assessment of another German edition Frankfurter Neue Presse.