Here’s the full sentence for context: “In 2009, Greece’s budget deficit exceeded 15% of its GDP. Fear of default widened the 10-year bond spread and ultimately led to the collapse of Greece’s bond market.”
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Bonds are like loans that get paid up all at once in the future. So if I buy a bond from a government, I get nothing for a period of time and then they give me the loan amount, PLUS some amount of interest for the loan.
For example, I can buy a 2 year bond or a 10 year bond from a Government, and I’ll get paid out after either 2 years or 10 years. Each bond will have an interest rate so I make profit on the bond.
But what happens if the economy is tanking? What if I think there is a really good chance my Government is going to go broke? Do I want to give them a 10 year loan? Heck no, I’ll take the 2 year bond please. Get in and get out.
So if the Greek Government was offered 2 year and 10 year loans, in good times, you might expect to see a lot of 10 year *and* 2 year loans, maybe more 10 year because people trust they’ll make a ton of profit in 10 years.
In the case of your example, Greece was struggling hard core and people got nervous and suddenly no one wanted 10 year bonds, and everyone was jumping on 2 year bonds.
The difference in desirability between the 2/10 year bonds is the spread and seeing a huge spread start appearing like is an indicator that *people think* the Government is in trouble. Again, it’s not a guarantee or a direct effect, but something an economist can point to, with numbers, and say “shits fucked”.
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