Sunday March 1, 2015 Search
Weather | Athens
11o C
6o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Greek quest for debt relief faces hurdles in Paris

By Marcus Bensasson

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 yesterday 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’s 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 Aug. 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 (18:07)  
A unionist agenda
The beguiling limelight
A breath of opportunity
Give the green light
Spanish PM hits back at Greek accusation of anti-Athens ´axis´
Spain's centre-right Prime Minister Mariano Rajoy hit back on Sunday against accusations from Greece's leftist premier that Spain and Portugal had led a conservative conspiracy to topple his...
Greece´s lenders skeptical on new bills but focus on funding needs
European officials have expressed concern that the Greek government has not consulted with its partners over its plans to bring new legislation to Parliament this week but the greatest focus...
Inside News
ANALYSIS
Greek debt becoming less sustainable
The agreement between the Greek government and its lenders, which was sanctioned by the Eurogroup last Tuesday, appears to be more of a respite and less of a sea change in the relationship b...
No progress seen in tax administration
Tax evasion loopholes remain wide open in Greece, the monitoring mechanisms are still shackled to political power, and an apparent determination to adhere to all laws and regulations conceal...
Inside Business
SOCCER
Super League to seek way out of impasse
The Super League governing board is convening again on Monday in a bid to overcome the tensions that keeps building up in Greek soccer despite the suspension of action on the field over the ...
BASKETBALL
Spanoulis leads Olympiakos to win over Malaga
A good second half was enough for Olympiakos to get the better of Unicaja Malaga (77-72) and score its seventh win in eight games at the second group stage of the Euroleague on Friday. Playi...
Inside Sports
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Super League to seek way out of impasse
2. Greek debt becoming less sustainable
3. No progress seen in tax administration
4. House protection criteria will benefit wealthy borrowers, too
5. Agenda
6. Spanish PM hits back at Greek accusation of anti-Athens ´axis´
more news
Today
This Week
1. Greece's lenders skeptical on new bills but focus on funding needs
2. Schaeuble softens tone, says Greece 'needs time'
3. Greece to prioritize IMF repayments but wants talks on ECB-held bonds, says Varoufakis
4. Lenders to be consulted over collective bargaining
5. Spanish PM hits back at Greek accusation of anti-Athens 'axis'
6. Greek debt becoming less sustainable
Today
This Week
1. Time for Alexis Tsipras to keep his nerve
2. Greek bailout deal faces review by euro officials next week
3. A fierce battle looms
4. The ignorance of the West about the culture of Islam
5. Greece says eurozone deal won time as cash bled from banks
6. Spain said to lead push to hold Greece to terms as Podemos grows
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2015, H KAΘHMEPINH All Rights Reserved.