Sunday October 26, 2014 Search
Weather | Athens
17o C
13o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Now or later?

By Nikos Xydakis

Greeceís return to the international bond market prompted varying reactions from political and financial analysts at home and abroad. However, most seem to agree that the ability to raise 3 billion euros from a five-year bond sold at a yield of 4.95 percent will provide a confidence boost, although the countryís credit rating remains deep in junk territory and the amount raised is relatively small. This improvement in the economic mood could help big Greek companies to seek capital abroad if local banks fail to extend loans to them.

Economically speaking, the bond will not yield any immediate gains. It will add an extra 75 million euros in annual interest to the existing debt, which already is huge and non-serviceable. In 2019, when the bond matures, Greece will have to pay another 3 billion euros on top of the 8 billion it was already scheduled to pay. As a result, the new burden will further complicate the mammoth effort to service the debt Ė even more so given that, as it seems, the whole restructuring effort will concentrate on rolling over the debt. So it would have made more sense to postpone the return to the markets until after the restructuring, which is expected to take place after the summer.

To sum up, the bond buys political time. It does so at a high price. It could serve some purpose if the money was used to buy back old debt on the secondary market. More likely, though, it will be used to pay off bonds worth 9.5 billion euros that mature in May, given that the Eurogroup divided the 8.3-billion installment into three smaller tranches tied to Greece meeting its commitments.

At the same time, everyone knows that the governing coalitionís majority hangs by a thin thread. The government cannot afford to vote through any more austerity measures. However, we know that the interest rates over the five year period will on one hand be subtracted from the already-hit welfare state, schools, hospitals and the benefits for the most vulnerable; on the other hand, they will also be subtracted from the countryís anemic public investment program which should naturally be the driving force of the economy.

ekathimerini.com , Friday April 11, 2014 (18:15)  
End of reason, end of humanity
Banks need to step up
Tension for tensionís sake?
Testing ground
Samaras pledges action after flash floods in Athens
Authorities began on Saturday assessing the damage done by flash floods in various parts of Athens a day earlier, with Prime Minister Antonis Samaras pledging that all those affected would b...
No court hearings for civil cases
Greek courts are to stop conducting hearings, which include witness questioning, for civil cases, according to plans drawn up by the Justice Ministry. Kathimerini understands that in a bid t...
Inside News
Nicosia says reforms are bringing results
Economic reforms in Cyprus are starting to yield results, the government said on Saturday after one credit-rating agency upgraded its rating and a second its outlook for the bailed-out count...
TAIPED waits for green light from Eurostat
Eurostat has frozen the securitization of properties that the Hellenic Republic Asset Development Fund (TAIPED) had been planning. The project, drafted to bring some 400 million euros into t...
Inside Business
BASKETBALL
A win is a win is a win for Olympiakos
A bad Olympiakos defeated a worse Laboral Kutxa 63-57 to make it two out of two in the Euroleague on Friday. In a game where the two teams had an overall field goal rate of about one in thre...
SOCCER
Panathinaikos snatches point at Eindhoven
Panathinaikos offered its fans a glimpse of its glorious past in European competitions snatching a draw at PSV Eindhoven, on an otherwise bad night for Greek soccer in the Europa League, as ...
Inside Sports
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
†RECENT NEWS
1. Nicosia says reforms are bringing results
2. Samaras pledges action after flash floods in Athens
3. No court hearings for civil cases
4. Greeceís lenders seem adamant that govít must act on bailout commitments
5. Future of Attica trash set to become clearer
6. Policeman admits to murder of his cousin-in-law
more news
Today
This Week
1. End of reason, end of humanity
2. Samaras pledges action after flash floods in Athens
3. Banks need to step up
4. Greeceís lenders seem adamant that govít must act on bailout commitments
5. No court hearings for civil cases
6. Nicosia says reforms are bringing results
Today
This Week
1. The past, present and future of the Greek debt crisis
2. Greeceís closed society is central to its current malaise
3. Greece must stick to reforms, says Schaeuble
4. At least 11 banks to fail European stress tests, three in Greece, report says
5. Cyprus to block Turkey's EU talks after EEZ violation
6. Stop moaning and get in the game
†††Find us ...
††... on
Twitter
†† ††... on Facebook ††
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.