Greece launches bond in key step to exiting bailout era

Greece has launched a seven-year bond auction, in the first major step this year toward a return to financing itself on international markets. State finance officials said the auction was launched Thursday, with a starting rate of 3.75 percent. The decision followed a two-day delay due to this week’s turmoil in global financial markets.

                                  

Greece’s government wants to secure a full return to the markets this year for the first time since the country was bailed out by international rescue lenders in 2010. The country’s third successive bailout, funded by other eurozone countries, ends in August.

The bond auction coincided with a visit to Athens by EU Finance Commissioner Pierre Moscovici, who is due to discuss debt relief proposals with Greek officials as well as the nature of post-bailout oversight measures.

“There is reasonable and unwavering hope that we can get out of the Greek program in good condition,” Moscovici said at a meeting with Greek President Prokopis Pavlopoulos.

The commissioner said he was hoping that the fourth and final review of the current bailout and post-bailout arrangements could be finalized by late June.

“There will be some important questions that I am very aware of. One would be what sort of post-program supervision will be needed, without it being an intrusion by EU officials, and one that allows the Greek (government) to manage its own growth strategy,” he said.

Greece is hoping lenders will back a French proposal to link the country’s debt repayment terms to its economic growth rate, in an effort to avoid a repeat of high repayment obligations during a recession.

“The bond issue reflects improvements in the Greek economy and a creditor commitment to come up with a debt relief plan,” John Papageorgiou, host of a seven-year Athens radio show devoted to bailout developments, told the AP.

“That would probably be tied to growth — so-called French model — and will also include a plan to monitor reforms related to debt relief measures, after the bailout. Markets would welcome them both.”

The European Commission, in forecasts released Wednesday, expects the Greek economy to grow by 2.5 percent in 2018 and in 2019.

https://www.apnews.com/27b35974ff7a40f29dbbbcdffdd83891/Greece-launches-bond-in-key-step-to-exiting-bailout-era