Crisis fund efsf earns money by incurring debt
Belgium also joined the group of countries that are getting minus yields on their short-term debt. The heibt investors pay on it, in order to be allowed to finance belgium’s state budget in the short term. Euro crisis countries like spain and italy, on the other hand, must continue to pay high interest rates.
The combination of a low interest rate policy and ample liquidity provided by the european central bank (ECB) is considered to be the reason for the strong demand for securities issued by sovereign debtors with strong credit ratings. It makes it difficult for banks and large investors to find places to park excess funds, thus printing yields. Spain and italy also recently obtained fresh funds more favorably – experts nevertheless continue to view the situation critically.