ECONOMY

Amid pandemic, Greece raises 2 billion euros in 7-year bond

amid-pandemic-greece-raises-2-billion-euros-in-7-year-bond

Greece raised 2 billion euros ($2.2 billion) Wednesday with a 7-year bond auction, a result the government hailed as confirmation of market confidence during difficult times created by the coronavirus pandemic.

Greek Finance Minister Christos Staikouras said the issue carried a 2 percent yield, and he described the outcome as satisfying given that a similar issue in July 2019 "in a much better economic environment" carried the same yield.

Greece decided to tap markets taking advantage of an improvement in borrowing rates driven by massive European stimulus packages to address the impact of the coronavirus.

Staikouras has said he expects the economy to contract by 5-10 percent this year due to the effects of the pandemic before rebounding in 2021.

Greece is particularly dependent on revenue from tourism, an industry that has been clobbered by travel bans and other restrictions to curb the spread of the virus. The pandemic is expected to significantly increase unemployment — already the highest in the European Union at more than 16 percent.

The International Monetary Fund has projected a 10 percent recession for this year, and a rise in unemployment to 22 percent.

The government said Wednesday's bond issue, Greece's second of the year, was aimed at continuing to normalize the country's access to bond markets following eight years of international bailouts that ended in 2018.

"Greece has proved that it can succeed, even under adverse circumstances," Staikouras said.

The country issued a 15-year bond in late January. The yield on Greece's 10-year benchmark bond dipped to historic lows of below 1 percent in February but soared to 4 percent weeks later amid global market panic surrounding the pandemic. The yield on Wednesday was at just over 2 percent.

[AP]