ECONOMY

Gov’t plans to borrow 10.5 bln in second quarter

The government plans to raise about 10.5 billion euros in the second quarter to service its debt, the highest in the eurozone as a percentage of gross domestic product (GDP), its debt agency (PDMA) chief said yesterday. Greece, which must cut its budget deficit below the EU’s 3 percent of GDP limit or face sanctions, borrowed 12 billion euros in the first three months of 2006. «The target for the second quarter is to borrow about 10.5 billion euros,» the head of Public Debt Management Agency, Spyros Papanicolaou, told Reuters in a telephone interview. Papanicolaou said Greece is planning a new five-year benchmark bond issue in the second half. «A new five-year benchmark bond of 5 billion euros and a private placement of 1.5 -2 billion euros are included in our borrowing plan for Q2,» Papanicolaou said. According to PDMA’s borrowing plan published last week, Greece will reopen a 10-year bond maturing on July 2016 and an inflation-linked bond maturing July 2025. A T-bill issue on April 4 will seek to raise 500-800 million euros. Greece is targeting total borrowing of 30 billions euros for 2006, about 7 billion less than in 2005. It borrowed more than it planned in 2005, topping an original 33-35 billion target, to plug a higher-than-expected budget deficit projected at 4.3 percent on GDP. (Reuters)