Greek State will exceed borrowing target this year

Greece will overshoot this year’s borrowing target in order to have contingency funds ready for any last-minute expenses that may be incurred at this summer’s Olympic Games, a senior government official said yesterday. The head of the national Public Debt Management Agency (PDMA) said that borrowing in the first two quarters had exceeded targets and that planned borrowing of 5.0 billion euros in the third quarter would bring the total above the year target of 30 billion euros. Greece had said it aimed to borrow 15 billion euros in the first quarter and around 7.5 billion in the second quarter. «We went ahead with extra (bond) issues in the first half to create a cushion for the Olympic Games,» PDMA head Christophoros Sardelis told Reuters. «We have already borrowed 28 to 29 billion euros (in the first two quarters)… Out of that, 24 billion is pure lending, and 5 billion is funds that PDMA is holding as reserves to use for emergency expenses for the Olympic Games,» he added. Spiraling Olympic security and construction costs have plagued state finances, and the final bill is expected to grow in the runup to the Games as many venues and infrastructure projects are still being built. Government officials have estimated the final bill will be at least 10 percent higher than the initial 4.6-billion-euro price tag. Earlier yesterday, PDMA announced it planned to reopen a 10-year bond in July, a three-year bond in August and a five-year bond in September as well as issue new 13-week, 26-week and 52-week T-bills in July. «We will get around 4.5 billion euros from the three reissues of benchmark bonds, at around 1.5 billion each,» Sardelis told Reuters, adding the T-bill issues would round up the total figure to 5 billion. The third quarter’s planned 5 billion euro issues would bring total borrowing to around 34 billion by the end of the third quarter. Speaking about plans for the fourth quarter, Sardelis said it was too early to know what needs the State would have after the Olympics or how much of the «cushion» would be used up for the Games. «Borrowing in the fourth quarter is expected to be less than the previous quarters,» he said, adding that any money left in funds for Games expenses could go to pay off debt.