ECONOMY

Bonds not so popular

The second issue of the so-called popular bonds was even more disappointing than the previous one, in mid-February. According to early data from the subscriptions for the savings bonds, which ended yesterday, investors subscribed for no more than 500 to 550 million euros’ worth of bonds, despite the raising of the ceiling for individual subscriptions to 15,000 euros from 10,000 in the earlier auction. In mid-February, the government had auctioned off 1 billion euros’ worth of savings bonds. Investors did not take up the whole offer; there were 86,251 valid applications for bonds worth a total 803.96 billion euros. Back then, Economy and Finance Minister Nikos Christodoulakis had said there would be two further savings bonds offerings, in May and August, worth 800 million euros each. The 12-month savings bonds, with a tax-free yield of 3.6 percent, slightly above the current inflation rate, were designed to help «small investors» get a return above inflation. Banks’ rates for savings accounts have plunged well below the inflation rate. The yield for the 12-month Treasury bill stands at 2.5 percent. The banks, responsible for marketing the bonds, have heaped scorn on the government’s measure, saying that it is a hasty and populist response by the government to the clamor about people getting «ripped off» by banks and losing their money. The International Monetary Fund (IMF), in its country report on Greece released before the first auction, said that «plans to provide above-market rates of return on popular savings bonds run counter to the general direction toward market-oriented reforms.» Economy and Finance Ministry officials said yesterday they had received complaints by would-be investors that banks had refused to sell them savings bonds.