Greece may be head­ing for bond mar­ket test ‘in days’

Muscat Daily - - BUSINESS -

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

Pierre Moscovici

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