Greece may be heading for bond market test ‘in days’
Athens, Greece - Greece is expected to return to the bond markets in 2018, but having secured its third bailout programme Athens may test the waters by issuing a new bond today.
Greek newspapers have been speculating that a bond market test could come in ‘a matter of days’.
‘Monday is probably the day even though nothing can be taken for granted’, Avgi, the ruling Syriza party newspaper said on Saturday.
The conservative Kathimerini newspaper reported that Athens appears willing to ‘take advantage of the current positive conjecture in the markets’. It said that markets are in a mood for taking risks right now and there are high levels of liquidity.
It seems to be a toss-up whether Athens will take the plunge or not.
“It is being discussed... Preparations are made for both scenarios and whatever happens we will be ready,” a source with knowledge of the government’s plans told AFP on Friday.
Greece has no immediate need to draw money from the bond markets. The European Stability Mechanism (ESM) will keep feeding the debt-ridden country with low rate loans until the end of the bailout programme in July 2018.
This funding gives Athens the chance to test without major risks its credibility in the capital markets after a tumultuous period of Grexit scares, hard deci- sions and painful reforms.
And last week eurozone finance ministers approved the latest € 8.5bn disbursement, just in time for Athens to meet major debt repayments and avert a default.
“Greece’s return to the markets is the step that everyone is waiting for,”European commissioner for economic and monetary affairs Pierre Moscovici said on Wednesday.
But, Bank of Greece governor Yannis Stournaras said on Tuesday that it was ‘rather early’ for a return to the bond markets.
In an interview with the Wall Street Journal he said “It would be even better, for instance, if Greece proceeds with two or three emblematic privatisations in the period to come. That would be more helpful to tap markets later.”
Also market sentiment may become volatile from September given possible changes in ECB monetary policy or in Germany’s election results, the Katherine daily noted.
Greece’s return to the markets is the step that everyone is waiting for