Greece makes a stunning financial recovery. Two years ago, the country seemed to be directed to disorderly bankruptcy and exit from the euro. Now Greeece returns to the financial markets by issuing five year bonds amounting to 2 billion. There are still political risks and the real economy just beginning to recover. However, the economic recovery is impressive. The ten year bond yield, which was more than 30% after the debt restructuring two years ago, is now at 6.2%. Two of the four major banks in the country drew Chapters 3 billion the previous week and Eurobank prepares to follow with a share capital increase of EUR 3 billion this month. Climate change in the markets due mainly to external factors: the promise of the European Central Bank, two years ago, to do whatever it takes to save the euro and the most recent interruption of romance between investors and emerging markets, which sends those looking for opportunities in places like Greece.
The center right government of Mr Antonis Samaras surprised observers within Greece and beyond, with the ability to continue the fiscal reforms initiated by his predecessors. The most significant achievements was the reform of the labor market, which restored the competitiveness of Greece and achieving a primary surplus in 2013. The Greek public debt is still close to 180% of GDP, but not paid as much as it seems, because the majority of the hands of the other States, as interest rates are a little over 2% and that the repayment will commence in 2022 and will last 20 years. So it is not surprising that investors seem to be willing to buy five Greek bonds. Meanwhile, Greece has the opportunity to improve the agreement entered into with its creditors Eurozone during the discussions will begin in a month. A positive result would include the maturity of the loan from 30 to 50 years, on the eve of the current low interest rate levels and the extension of the grace period by another five years.
The output markets probably means that Greece is not facing funding gap for the coming years. Approximately one quarter of the workforce is unemployed and unemployment in order to reduce to an acceptable level, the Greek government should continue its reforms and the economy must be developed for many years. The biggest threat comes from politics. Just last week the government was shaken when released a video showing the personnel officer of Prime conversing with the spokesman of the Golden Dawn. The assistant, who has resigned in the meantime, says that two ministers told the prosecutor to capture the leadership of the Golden Dawn. The ministers denied the fact and the government does not seem to fall. However, if it falls, a government SYRIZA would be less friendly to investors. That being said, the new bond issue is an important milestone in the recovery of Greece.
By Nicole P.