Bunds Post Record Weekly Gain as Greek Concern Spurs Safety Bid

German 10-year bonds posted their biggest weekly advance on record as European leaders struggled to find funding for the euro-area rescue plan and admitted that Greece may exit the currency union.

The additional yield that investors receive for holding Italian, French, Greek and Belgian 10-year debt instead of benchmark German bunds rose to euro-era records as Group-of-20 leaders meeting in Cannes, France, disagreed on boosting the International Monetary Fund to fight the debt crisis. The Greek two-year note yield surged above 100 percent as Prime Minister George Papandreou was forced to backtrack on plans to hold a referendum over austerity measures. The European Central Bank unexpectedly cut interest rates.