Bond-Market Turmoil Hits Greece, but This Time Athens Is Holding Up Better

Global bond markets are under pressure, and Greece is hardly immune. But unlike in past bouts of financial turmoil, investors aren’t singling out Athens for especially harsh treatment - a notable shift for a country once at the center of Europe’s sovereign-debt crisis.

The yield on Greece’s benchmark 10-year government bond stood at 4.523% on Oct. 2, down three basis points on the day but 46 basis points higher over the previous month and 108 basis points higher since the start of 2026. Yields have risen across the Greek curve, with the 30-year bond reaching 5.025%.

The selloff is global. Germany’s 10-year yield stands at 3.438%, while Italy’s is 4.666% and France’s 4.910%. U.S. and U.K. 10-year yields are above 5%, reflecting an environment shaped by geopolitical uncertainty, elevated energy prices, persistent inflation pressures and tighter monetary conditions.

What is striking is Greece’s relative resilience.

The spread between Greek and German 10-year bonds - a closely watched measure of the additional risk investors attach to Greek debt - is about 109 basis points.

That is below Italy’s 123 basis points and France’s 147. Spain and Portugal remain tighter, at 66 and 54 basis points, respectively.

For Greece, that represents a substantial change from earlier periods of market stress. Analysis covering 2016 through 2026 indicates that Greek yields have become less sensitive to global financial shocks since the pandemic, including when uncertainty is measured using indicators such as the VIX volatility index.

The explanation lies largely in Athens’s improved fiscal position.

Government debt, which stood at 177.8% of gross domestic product in 2022, fell to 154.2% in 2024 and is estimated at 136.8% this year. Greece has also moved from a primary budget deficit of 0.1% of GDP in 2022 to a 4.8% surplus in 2024, with a 3.2% surplus projected for 2026.

Economic growth is helping. Greece is forecast to expand by 2% this year, compared with 0.9% for the eurozone. None of that makes Greek bonds immune to a global selloff. But it suggests something that would have seemed unlikely during Europe’s debt crisis: When investors get nervous, Greece is no longer automatically among the first countries they run from.