Athens hopeful new bond will open access to ECB funds

27 July 2017
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Greek Prime Minister Alexis Tsipras on Wednesday (26 July) claimed that his country’s first bond sale in three years would help convince the European Central Bank to provide additional liquidity to its struggling economy.
Tsipras argued that the “positive” sale would persuade the ECB to induct Greece into its bond-buying programme, a Greek goal for months.
“This goal still lies ahead and yesterday’s (bond sale) brings it closer,” Tsipras told Alpha TV.
“Now conditions (to request access) are much more favourable,” he said.
On Tuesday, the Greek treasury sold €3bn worth of five-year bonds at a rate of 4.625%.
That is below the 4.95% percent in Greece’s last auction of bonds in 2014, reportedly the target the Greek government had set in the new offer.
Half the bonds sold were new, and half were issued to be exchanged for five-year bonds sold in 2014.
Tsipras on Wednesday said the new bond had attracted twice the demand required.
He also claimed that the Greek economy had finally turned the corner after seven years of crisis.
“This is the beginning of the end of the ordeal… we are certain that the worst is behind us,” he said.
Greece currently has no real need to draw money from the bond markets as it recently received renewed financial support at lower rates under its international bailout that should see it through until next year.
But its economy, crushed by years of recession, needs access to the ECB’s monthly purchases of €60bn of government and corporate bonds which power growth and push up prices.
Already, there is talk that the ECB will be winding down the programme.
The ECB has so far refused to include Greece in its bond-buying owing to the explosive nature of its public debt.

Source: Euraktiv

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