For the first time since 2010, Greece has managed the sale of a ten-year government bond. However, experts warn: The great success from. And the country still needs to do some homework.
Two and a half billion euros wanted to take on the highly indebted country on the market. Were offered to more than eleven billion. According to the TV station Skai, the demand for ten-year-old title from Hellas was so strong that the order books were already on Tuesday afternoon. Most of the investors come from Europe and the USA. For the Greek Treasury, the interest rate is less than 3.9 percent. The bad news: This is significantly more than in other Euro area countries. The good news is that This is pre-crisis level. Because in the past, Greece could not refinance its debt, it is much cheaper. For comparison: In July 2003, so in earlier times, paid for the Athenian Minister of Finance a return of 3.91 percent for a ten year old title. In September 2005, after all, a 3.25 percent interest were due and payable.
“The bond will be positively received,” headlines on Wednesday, the Athens economic journal Naftemporiki. “The bond was a positive step, a huge success, I would not speak, however,” says Panagiotis Petrakis, Economics Professor at the University of Athens, in an interview with DW. His justification: Portugal, a country with similar structural problems, like Greece, currently pays 1.2% interest on long-term investors. Petrakis says, it would have been better to wait and to go only next year on the capital market. Financial expert Kostas Stoupas looks similar to this: “Greece has placed a long-term loan was, of course, a good thing; however, the interest rate was much higher in comparison to other countries with high debt,” cautions the Analyst.
Gloom was in the past, the normal state in Greece
A real “return to the markets”
Prior to the Expiration of the multi-billion EU aid programmes had dared the left Prime Minister Alexis Tsipras a Test on the international financial markets: In July 2017 Greece was able to raise three billion euros through a five-year bond. At the beginning of 2019, a further five-year bond was added. Now the bar is placed higher. Because ten-year Bonds are the benchmark for the credit rating of a country. To law, Panagiotis Petrakis: “Who buys a ten year bond of a state, after all, the fact that this state is going in the next ten years, broke.”
The Greek Finance Minister has a laugh at the Moment
Finance Minister Euclid Tsakalotos is on the right track, and criticized his critics. “Many of them have not made a bet, that we can trust ourselves to the market. Then it was said, we dare in the market, but not with ten-year Bonds. Today, no one is allowed to say that we have no access to the market,” said Tsakalotos on Tuesday evening. Basically, the money is not needed in Hellas urgently. Finally, the country has accumulated a financial cushion of about 25 billion euros and is thus able to serve its liabilities to 2021, without any problems. The Athens government is primarily concerned to demonstrate normality. The time seems favorable, especially since the US rating Agency Moody’s recently raised its rating for Greece by two notches to B1. On Tuesday, Moody’s has downgraded the credit ratings of three Greek banks up.
Banks have a headache
Almost surprisingly this appreciation appears to suffer the Greek banks for years under bad loans and yield loss. The so-called “distressed assets” of the banks – loans that are not serviced as agreed, over 40 percent of all the loans ranged from. Leading credit institutions to close branches and save on the staff. Not least the EU Commission is pushing for reforms in the banking sector. In its most recent Greece visit in early March, EU economy Commissioner Pierre Moskovici about “delays complained of” in this regard, and called for clear political decisions.
The last thing the Greek banking sector, now, is a medium-sized scandal. And that is exactly what has happened: According to Greek media, health Minister Pavlos Polakis received a consumer loan in the amount of 100,000 Euro to the favourable conditions of the Attica Bank. It is a small credit institution is not subject to the direct supervision of the European Central Bank (ECB). This does not necessarily mean that a credit to Polakis was right. Additional impetus is given the history, however, by the fact that the Minister is complaining to the Central Bank chief Yannis Stournaras and the phone call secretly recorded. “That’s not normal,” said Stournaras in Public. The Whole thing seems to have legal repercussions.