Germany-France bond yield spread widens to record

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The gap between German and French 10-year borowing rates, a critical measure of tension at the heart of the eurozone, widened to a record in early trading on Tuesday.

The gap increased to 172.6 basis points or 1.726 percentage points, with the French borrowing rate rising sharply to 3.500 percent and the German rate fell to 1.775 percent, meaning that France has to pay about twice as much as Germany to borrow.

The equivalent gap between German and Spanish borrowing rates also widened to a record, further signalling great anxiety about the components of the eurozone debt crisis as Italy and Greece head towards new budget reforms under new governments.

© 2011 AFP

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