Greece says decisions on new bond issue after Eurogroup

BRUSSELS: The Greek Government could discuss the timing of a possible new bond issue after next week’s meeting of euro zone finance ministers which is expected to decide on debt relief measures for Athens, the economy minister said. Heavily indebted Greece, shut out of bond markets in 2010, has gone to the markets twice over the last 12 months in a bid to build a cash buffer that could reassure investors after its third bailout programme ends in August.

“All our efforts are focused on the Eurogroup of the 21st (of June) where we expect to have an agreement on debt relief,” Greece’s Alternate Minister of Economy and Development, Alexis Charitsis, told a news conference yesterday in Brussels. Asked whether Greece could issue new bonds before the end of its bailout programme, he said: “Any other discussions happen after the 21st”. The Eurogroup of euro zone finance ministers will discuss possible new debt relief measures for Greece the meeting in Luxembourg. EU officials have repeatedly said next week’s meeting will be crucial to seal Greece’s financial future, as decisions will need to be made on the use of about 40 billion euros ($47 billion) that are still unspent under the 86-billion-euro euro zone-funded bailout programme which expires on Aug. 20. Officials are considering several options to reduce debt servicing costs for Athens, including an extension of maturities and grace periods of up to 15 years on some 130 billion euros of loans issued to Greece under the second bailout. They are also considering a buyout of expensive loans worth more than 20 billion euros from the International Monetary Fund and euro zone central banks due over the next decade. They would be replaced with cheaper loans from the European Stability Mechanism, the euro zone bailout fund. In exchange for accepting strict oversight of the implementation of structural reforms, including on tax and pensions, Greece could also get next week new loans of about 11 billion euros, a senior Eurogroup official said yesterday. — Reuters