The crisis as usual is when things are getting worse. Yesterday, Germany - Europe's largest economy - was hit by the weakest demand for its bonds since the creation of the Eurozone; France was warned that it might lose its "AAA" rating again, if its debt burden increases; the Central Bank of Athens warned that Greece has only one chance left to remain the in the Eurozone, and Fitch warned that Austrian banks will reduce their loan to deposit ratio in Central and Eastern Europe. The crisis has reached normal levels.
Germany yesterday faced the lowest demand for its bonds since the inception of the Eurozone, which fuels fears that Berlin is threatened by the sovereign debt crisis.
In yesterday's auction, Germany only managed to raise 60% of the six billion Euros in bonds it wanted to sell. The German state placed only 3.644 billion Euros worth of bonds, at a yield of 1.98%. The very low yield discouraged investors.
Under these circumstances, Bundesbank (the German central bank) was forced to buy the bonds for which there were no buyers. These bonds, which have a ten year maturity, are worth 2.36 billion Euros.
German officials cited a record-low yield and the "extraordinarily nervous market environment" as the cause of auction's failure.
The agency for the management of Germany's debt explained that the bonds for which there were no bidders will later be sold on the secondary market, and Germany will not face any financing issues.
German bonds are considered the benchmark of the European market, and the safest for investors, and that is precisely why yesterday's situation represents "a disaster", according to analysts.
Marc Ostwald, analyst at "Monument Securities" of London, said, quoted by Reuters: "It is an utter disaster. It is not a good sign, this is the worst auction which wasn't completely sold this year and it
