ECONOMY

Borrowing in Q4 set at 2.6 bln euros

The Greek state plans to borrow at least 2.6 billion euros ($3.3 billion) in the fourth quarter via government paper, the head of debt management agency PDMA said yesterday. That would be in line with the government’s total borrowing target for this year as Greece struggles to contain its debt, one of the highest in the eurozone. «We intend to raise 1.2 billion euros from a reopening of a three-year bond in October and another 1.2 billion when we reopen a five-year bond in November,» PDMA chief Spyros Papanicolaou told Reuters in a telephone interview. He said an auction of treasury bills on October 3 will tap the market for 200 million euros. Earlier yesterday, the debt agency announced its issuance schedule for the fourth quarter, which also includes a supplementary auction of three-year paper in December, subject to its cash position. Should the agency opt to proceed with its December issuance plans, total borrowing this year will hit about 31 billion euros, which is about a billion above the government’s projections earlier this year. «It’s an auction that may not take place as our cash position does not require it,» Papanicolaou said. «So far this year we have borrowed about 27 billion euros.» He said total borrowing may turn out lower than 31 billion euros this year, depending on the country’s fiscal situation – deficit, revenues and spending. Greece, with one of the highest debt levels in the eurozone as a percentage of gross domestic product, is aiming to squeeze debt down to 104.8 percent of GDP this year from 107.9 in 2005. Athens is also scrambling to shrink its deficit to below the EU’s 3 percent cap to avoid sanctions, targeting a fiscal gap of 2.6 percent this year from 4.5 percent of GDP in 2005.