The yield of the Greek 5-year bonds is below zero

Greece has once again turned to the markets and this time the five-year bond yield fell below zero for the first time on Monday after the European Central Bank’s decision to maintain the pace of its asset purchase programme spurred a rally in riskier eurozone debt.

This essentially means that investors are paying Athens to borrow money for five years, despite the fact that the pandemic raised debt levels and dropped growth. Italy remains the only eurozone member with positive five-year bond yields, albeit only marginally above zero per cent.

Bond markets within the EU saw some ups and downs in May on speculation that the ECB would reduce the size of bond purchases under its €1.85tn emergency pandemic stimulus packages. But the market recouped its losses after ECB officials talked down the likelihood of “tapering”, and then followed through by sticking with its recent pace of buying at last Thursday’s policy meeting.