Friday August 29, 2014 Search
Weather | Athens
31o C
24o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
ESM to ensure success of bond issue

 Mechanism may buy between one and two thirds of 5-year debt to enter the market, serving as a guarantor

Greece’s stated aim this year, in the words of its prime minister, is to return to the money markets, and the European Stability Mechanism (ESM) is set to play a key role in that effort, despite European Commission officials and investment managers Pimco saying they don’t expect Greece to return to the markets before 2015.

Athens has repeatedly said that it will tap the markets in the second half of 2014. Market professionals take it for granted that the ESM will guarantee the project’s success by offering some sort of credit line. One of the main scenarios under consideration is for the ESM to support the Greek effort by stating in advance that it will cover a significant part of the state bond issue, to the tune of 33 to 67 percent.

Therefore if Greece proceeds with the issue of five-year bonds to borrow 2 billion euros and ESM states it will cover 50 percent of it, then – depending on the response by private investors – the European Mechanism could proceed to the purchase of bonds up to 1 billion euros. That move would essentially safeguard that the issue would not be left uncovered, with the indirect support convincing even the most skeptical investors to participate in the Greek issue.

Of course such support would come with conditions attached, mainly concerning the implementation of the structural reforms Greece has agreed to in the context of its fiscal streamlining.

Nevertheless a European Commission document dated December 16, 2013 that emerged on Friday suggested Greece will only make a partial return to the money markets in 2015. In a response to an investigation by the European Parliament on the bailout agreements for eurozone countries, the Commission expressly stated that “the expectation is that market access for Greece could partly resume from 2015.” On Friday a senior officer at Pimco also told German newspaper Suddeutsche Zeitung that the firm is not expecting Greece to return to the market before 2015.

Despite these statements, the messages coming from the international markets point to an eagerness on the part of investors to buy Greek debt again, as they watch the spread between the benchmark 10-year bond with the German 10-year bund continue to drop.

ekathimerini.com , Friday Jan 3, 2014 (21:16)  
Athens water utility´s net income falls to 15.6 mln euros
Greek stocks head south for fourth month in a row
Greek bank Piraeus reports Q2 profit of 164 mln euros
Greece´s Eurobank posts 301-mln-euro loss in Q2
Kouvelis avoids ruling out his potential candidacy for Greek president
As speculation intensifies about Democratic Left (DIMAR) leader Fotis Kouvelis being the ruling coalition's favored candidate for president, with the term of incumbent Karolos Papoulis set t...
Greek PM to meet Juncker in Brussels, host Coelho, Rajoy in Athens
After a flurry of meetings and telephone calls with European officials, Prime Minister Antonis Samaras is set to meet with incoming European Commission President Jean-Claude Juncker at a Eur...
Inside News
Iliadis triples up as Aguiar stuns Tcheumeo
Greek star Ilias Iliadis claimed his third world title in the under-90kg category in Chelyabinsk on Friday as Brazilian Mayra Aguiar and Colombian Yuri Alvear won gold in the women’s under-7...
SOCCER
New Greece coach Ranieri promises to give youth a chance
Claudio Ranieri has promised to give young players a chance after being officially presented as the new coach of Greece. The much-travelled Italian signed a two-year deal in July to have his...
Inside Sports
ANALYSIS
Greek quest for debt relief faces hurdles in Paris
As Greek Prime Minister Antonis Samaras tries to follow Ireland and Portugal out the bailout exit door, he faces a month of bargaining. For a nation that’s already gone through the biggest d...
COMMENTARY
Stifled dreams
At more or less the same time every year, we see the same images of high school graduates looking through the Education Ministry’s lists of those who passed and those who failed the national...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Athens water utility´s net income falls to 15.6 mln euros
2. Greek stocks head south for fourth month in a row
3. Greek bank Piraeus reports Q2 profit of 164 mln euros
4. Greece´s Eurobank posts 301-mln-euro loss in Q2
5. Iliadis triples up as Aguiar stuns Tcheumeo
6. New Greece coach Ranieri promises to give youth a chance
more news
Today
This Week
1. Greek quest for debt relief faces hurdles in Paris
2. Strong undersea quake occurs off island of Milos, felt in Athens
3. Dozens of migrants intercepted in the Aegean
4. Rendi shootout leaves would-be hypermarket robber dead
5. Gov't jet carrying Venizelos back from Turkey conducts emergency landing
6. Finance Minister holds final preparatory talks before Paris meet with troika
Today
This Week
1. Brussels warns Greece over plans to allow construction near Korinos beach
2. Attack on gay couple in Athens leaves one man needing surgery
3. Merkel cites euro’s ‘construction flaws’ as economy sputters
4. Purification rituals
5. Second man held over double murder in Mani
6. The battle against progress
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.