Greece’s Return to Markets Met with Cautious Remarks from International Press

Tuesday, July 25th, 2017
Last Update: 13:27

Greece’s return to tapping the international bond markets for the first time since 2014 is met with mixed remarks from the international press.

In its electronic version, German magazine Spiegel reports on Greece’s test run on markets as follows: “Return of the troubled child: Greece wants to raise money again from international investors. This is a test of whether, after completing the bailout program, Athens can stand alone on its feet. ”

The Süddeutsche Zeitung newspaper comments: “About a year before the completion of the third rescue package, Greece dares to return to the markets. After a three-year interruption, the troubled country wants to issue a five-year bond again, as the government announced Monday in Athens. For this reason, it has commissioned six international banks, Deutsche Bank, BNP Paribas, Bank of America Merrill Lynch, Citigroup, Goldman Sachs and HSBC. This is the country’s first borrowing effort since 2014, when Greece borrowed twice from the markets before it faced financial problems again.”

Frankfurter Allgemeine Zeitung comments on the same issue: “The return of Greece to the markets is a triumph for Prime Minister Alexis Tsipras and Finance Minister Euclid Tsakalotos. Both could not resist the first opportunity to issue a five-year bond. But not without reason, Bank of Greece Governor Yiannis Stournaras and ECB President Mario Draghi suggested caution last week. The new Greek bond is a test. It could become a symbol of recovery if the prospects for the Greek economy continue to improve and if the value of the new securities grows. But what if privatizations are delayed, if reforms are postponed and if new ideological conflicts break out in the government?

“As soon as the first investors of the new bonds begin to have doubts, Tsipras will face the repercussions. The Greek Prime Minister takes on a risk. In the end, however, it may be good for Tsipras to get the positive verdict of the markets.”

French Press: Test of paramount importance for market confidence

On its website, La Tribune says that the Greek government’s decision to issue state bonds is “a test of paramount importance for market confidence in a country that could finally recover.”

In more detail, La Tribune states that “experts considered it appropriate to test the markets, although for the time being and by 2018, the country does not need it because it benefits from a European, IMF and IMF assistance plan.” The report adds that “the decision comes after the IMF’s agreement last week for its future involvement in the aid plan for Greece and the announcement of the country’s credit growth outlook by the S & P Global Ratings.”

Finally, the report refers to Commissioner Pierre Moskovici’s visit to Athens and his statements that “there is light at the end of the tunnel” after the difficult years country, “but today things are much better.”

“Debt: Tsipras’ Greece returns to the markets” is the title of Le Point website. It describes Greece’s effort to tap the bond market as “a test of paramount importance for the confidence of the markets in a country that could finally recover.” According to the report, a week ago there was a complete excitement about the issue. “It is the right time,” Klaus Regling, Director of the European Stability Mechanism. He also says that Bank of Greece Governor Yiannis Stournaras believes that “the government should first implement two or three emblematic privatizations,” and Mario Draghi of the ECB also said that “these concerns should be taken into account.”

New York Times: Issuing bonds doesn’t solve Greece’s problems

The issue of a bond gives hope that Greece is finally ready to leave aid programs behind, the New York Times commentary says, adding that it is a defining moment. If investor interest is strong, it can be a landmark not only for Greece but also for the euro zone.

But if Athens has difficulty finding buyers, the sale of the bond could be another blow to the country that has only just begun to see signs of recovery, the newspaper says.

“Issuing a bond does not mean that problems for Greece have ended. It is just the first step that Athens should take to test if it can raise money from international markets to support its economy when the current program expires in August 2018,” the report continues.

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