CRISIS AS USUAL The German government only sold 60% of its 10-year bonds issue

Germany yesterday faced the lowest demand for its bonds since the inception of the Eurozone, which fuels fears that Berlin is threatened by the sovereign debt crisis.

In yesterday's auction, Germany only managed to raise 60% of the six billion Euros in bonds it wanted to sell. The German state placed only 3.644 billion Euros worth of bonds, at a yield of 1.98%. The very low yield discouraged investors.

Under these circumstances, Bundesbank (the German central bank) was forced to buy the bonds for which there were no buyers. These bonds, which have a ten year maturity, are worth 2.36 billion Euros.

German officials cited a record-low yield and the "extraordinarily nervous market environment" as the cause of auction's failure.

The agency for the management of Germany's debt explained that the bonds for which there were no bidders will later be sold on the secondary market, and Germany will not face any financing issues.

German bonds are considered the benchmark of the European market, and the safest for investors, and that is precisely why yesterday's situation represents "a disaster", according to analysts.

Marc Ostwald, analyst at "Monument Securities" of London, said, quoted by Reuters: "It is an utter disaster. It is not a good sign, this is the worst auction which wasn't completely sold this year and it is no wonder that the yield of bonds in the market has increased because of that".

After the failure of the German bond auction, the Euro depreciated. At 10:29, on the New York Market, the exchange rate for the Euro was 1.3369 dollars, down 1% over the previous day.