January 9, 2012
Investors Pay to Lend to Germany, Want More From France
BERLIN (Reuters) – Investors paid to lend Germany a combined 3.9 billion euros (3.2 billion pounds) for six months on Monday, accepting a loss in a renewed flight to safety from the euro zone debt crisis.
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France, by contrast, had to pay more to borrow short-term funds, albeit that demand for its bills was strong. Investors are increasingly focusing on a handful of euro zone economies, notably Germany and The Netherlands, to park their money.
While yields on the bonds of peripheral euro zone countries have hit record highs in recent months on concerns about the debt crisis, Germany’s yields have fallen to record lows.
On Monday they went negative for the first time at a regular auction, sliding to -0.0122 percent compared with a positive return of 0.001 percent at a similar auction in December.
Dutch bill yields also went negative last month, meaning that investors are actually losing money by buying the supposedly safe assets. Based on Reuters estimates, Berlin will earn 242,000 euros on the money it borrowed on Monday