Awwal 10, 1432 / April 14, 2011, SPA -- Greek borrowing costs surged to new highs on Thursday and pressure rose on other financially weak euro zone countries after Germany suggested for the first time that Athens may need to restructure its massive debt load, Reuters reported. Central bankers and European Union officials warned a restructuring would lead to economic "catastrophe" for Greece and the government vowed to deliver on the ambitious fiscal goals set out for it by the EU and International Monetary Fund in last year's 110 billion euro ($160 billion) rescue. But doubts are growing that Greece will achieve those targets in time to return to the capital markets for funding next year, stoking fears that the European debt crisis that has raged since late 2009 could be entering a new viral phase. With a debt mountain that is expected to approach 160 percent of annual output by 2013 and EU/IMF money due to run out that same year, some move to reduce Greece's debt burden such as reducing or postponing repayments to its bond investors looks increasingly unavoidable. German Finance Minister Wolfgang Schaeuble became the first senior euro zone official to acknowledge publicly that restructuring was a possibility in an interview in the Thursday edition of German newspaper Die Welt. German officials later tried to play down his comments, but they helped send Greek bond yields soaring, with 2-year debt rising above 18.4 percent and 10-year bonds hitting 13.4 percent. Greek 5-year credit default swaps hit a record high of 1,070 basis points, up 23 basis points. Spanish 10-year bond yields, which have remained steady since neighbour Portugal announced last week it would follow Greece and Ireland in seeking a bailout, also edged higher to hit levels not seen in a month. The euro, which has risen steadily against the dollar this year, also fell back. -- SPA
