Interest on Dutch government bonds below eurozone average

Interest on the latest ten-year government bond was 3.4 percent in December 2009. Interest on Dutch government bonds is currently below the eurozone average. With 5.5 percent, the interest rate on Greek government bonds was by far the highest. The German government paid 3.1 percent, the lowest interest rate on the most recent ten-year loan.

Interest on most recent ten-year government bonds in euro countries, December 2009

Interest on government bonds marginally lower

Since July 2009, the interest rate on Dutch government bonds has gradually dropped. In most other countries using the euro as their currency, December’s interest rate was also lower than six months ago, but in Greece, the interest rate has risen distinctly in November en December. This is due to high government deficits and the reduced confidence in Greece’s ability to meet its debt obligations.  

Interest on most recent ten-year government bonds

Wider gap between highest and lowest interest rate in December

In 2007, the gap between the lowest and highest interest rate on government bonds varied between 0.3 and 0.7 percentage points. Next, the gap widened to reach a record high in March 2009. At the time, the interest rate on Greek government bonds had surged to 5.9 percent, while the rate on German government bonds stood at 3.0 percent. Subsequently, the gap gradually narrowed, but in December the gap widened again, caused by a substantial interest rate increase on Greek government bonds.

Difference between highest and lowest interest rates on government bonds within the eurozone

Wouter Jonkers