Tuesday November 25, 2014 Search
Weather | Athens
13o C
8o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
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 debt restructuring in history, the key may lie in more relief. Talks that could ultimately set the stage for that begin in Paris next week when government and officials from the European Union, European Central Bank and International Monetary Fund meet to discuss September's review of the country's rescue program.

“The Paris talks are critical,” Michael Michaelides, a rates strategist at Royal Bank of Scotland Group Plc in London, said on Thursday by e-mail. “They will lay the framework for discussions that will include a debt deal as well as the 2015 budget and the latest key reforms.”

Two years ago, with Greece’s euro membership in jeopardy and the currency region close to splintering, the government persuaded private bondholders to write down about 100 billion euros ($132 billion). Greece must pass next month’s bailout review before European partners will consider writing off more borrowing. At about 175 percent of gross domestic product, Greece’s debt burden remains the biggest of any euro member.

In Ireland, which exited its 67.5 billion-euro bailout in December, the debt ratio is forecast to be 121 percent this year, the European Commission said in May. In Portugal, the ratio will be 127 percent, it said.

Yields Decline

The yield on Ireland’s benchmark 10-year bonds dropped to about 1.76 percent yesterday compared with a peak of 14.2 percent in July 2011, while the yield on the comparable Portuguese security was 3.1 percent. Portugal’s 78 billion-euro international bailout program ended in May.

Greek 10-year yields have fallen to 5.76 percent, close to June’s record low, compared with a high of 44.21 percent in March 2012 on the eve of the debt restructuring.

While Samaras hasn't laid out a detailed timetable to exit the bailout, the prime minister has repeatedly promised that Greece won’t need another rescue.

The bond rally allowed the government to tap international markets twice this year, raising 4.5 billion euros in three- and five-year securities. Still, last month’s 1.5 billion-euro sale of three-year notes fell short of the government’s target of as much as 3 billion euros.

Budget Surplus

Samaras' euro partners stalled on granting more relief by, for example, extending the terms of loans or cutting interest rates on the nation’s 240 billion euro bailout.

The country's primary budget surplus of 0.8 percent of GDP last year commits its euro-area partners to additional debt relief, provided it can convince them that it’s also abiding by the economic reforms agreed to in the bailout. A primary surplus excludes payments to service debt.

"Greece is trading off other assets awaiting the talks in Paris next week followed by the troika review and developments on that front," said Ciaran O’Hagan, head of European rates strategy at Societe Generale SA in Paris. "Greek bonds have become market followers for the time being, but at least the yields are performing in line with markets."

Political Strife

Winning debt relief isn’t the only problem facing Samaras.

In September, he will try to pass laws to deal with 77 billion euros of non-performing loans at the country’s banks. Samaras’s New Democracy and coalition partner Pasok together have 154 seats in the 300-member Greek Parliament, and the government's stability was tested by EU elections in May won by the anti-bailout Syriza party.

Syriza has said it will block whatever candidate Samaras’s coalition government puts forward to replace President Karolos Papoulias, whose term ends in March.

Samaras may have to find support among minor parties and independent lawmakers to secure the two-thirds parliamentary majority required for a president to fill the post.

"Successfully electing a new president is neither trivial nor impossible,» Nomura International Plc said in an August 26 note to clients. "It seems that some additional factor will be needed to tilt the balance toward success or failure in the task. This factor will likely be progress in official debt relief and the extent to which Greece manages to enter a visible path toward exiting troika supervision."

[Bloomberg]

ekathimerini.com , Friday August 29, 2014 (10:25)  
Debtors snap up offer for easier settlements
Belgium gas firm said to be eyeing DESFA
OLP approval paves way for investment in Piraeus
Airport tender exceeds expectations
Hundreds of migrants on crippled ship off Crete
Ships from Greece rushed to help after a crippled freighter crammed with hundreds of migrants floundered for hours Tuesday in gale-force winds and high waves in the Mediterranean Sea, offici...
Policemen suspected of working at Piraeus bar where shooting took place
At least three serving policemen are thought to have been working at the bar in Mikrolimano, Piraeus, where a 31-year-old man opened fire with an AK-47 early on Saturday, resulting in 15 peo...
Inside News
SOCCER
Atletico eyes last 16 berth against Olympiakos
Greek champion Olympiakos faces a tough task if it is to prevent last season's beaten finalist Atletico Madrid sealing its passage into the last 16 of the Champions League at the Vicente Cal...
SOCCER
EPO ends soccer suspension, Super League resumes
Soccer action will resume this weekend after the Super League convened on Monday, elected a new president and alternate president and sent a letter to the soccer federation that assures it t...
Inside Sports
COMMENTARY
Beware of the fallen idols
Akis Tsochatzopoulos, a legendary figure of the Greek socialist movement, a man who came very close to taking over the party that governed the country for half of the time following the fall...
EDITORIAL
The hard truth
The coalition government must tell the truth to the Greek people, even if this entails admitting to mistakes made over the last few months. The country’s citizens are fully aware of how cruc...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Hundreds of migrants on crippled ship off Crete
2. Atletico eyes last 16 berth against Olympiakos
3. Debtors snap up offer for easier settlements
4. Belgium gas firm said to be eyeing DESFA
5. OLP approval paves way for investment in Piraeus
6. Airport tender exceeds expectations
more news
Today
This Week
1. Anastasiades to undergo heart surgery in the US on Dec 4
2. Cargo vessel carrying hundreds of migrants adrift southeast of Crete
3. Trade deficit widens by 8.7 percent during Jan-Sept period, says ELSTAT report
4. Two police officers among 9 arrested for drug trafficking
5. Stop Mediterranean becoming vast migrant cemetery, Pope tells Europe
6. Fraport, Copelouzos offer highest bid for Greek regional airports
Today
This Week
1. Double quake on Atalanti fault line rattles Greek capital [Update]
2. Biden heads to Istanbul amid tension over Cyprus EEZ violation
3. Give Greece a chance
4. Every age has its collaborators
5. Anti-junta uprising anniversary to be marked amid tight security
6. Carlsberg takes control of Greek brewer Olympic Brewery [Update]
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.