By G. Kouros
[email protected]
The Greek coalition government’s top economic team is reportedly working feverishly on preparations for the country’s closely watched foray into the markets for its borrowing needs, even if the prospects is being billed by all sides involved as a “test run”.
Nevertheless, for the beleaguered leftist-rightist government in Athens a successful attempt to borrow from markets will mark a milestone in the crisis years, convey confidence to the country’s Euro zone partners and generate a much-needed fillip for its imploding approval ratings.
An auspicious “test run” before the ongoing third bailout program ends in August 2018 is viewed as imperative for Greece’s medium-term economic outlook, assuming that the program is successfully concluded and with the ESM’s emergency credit line considered a “crutch” in any market exit.
The ESM’s “credit line” will be comprised of roughly 30 billion euros left over from the third bailout program that was initially forecast to reach 86 billion euros.
Greece’s return to the markets, even with an ESM “security blanket” and regardless of whether a much-coveted re-inclusion of Greek bonds in the European Central Bank’s (ECB) Quantitative Easing (QE) is approved, is viewed as an important step towards normalizing the country’s economic prospects and growth potential.
As “N” reported previously, the Tsipras government wants to first “test the waters” with a sovereign bond issue on July 17, when a previous three-year issue, worth 2.089 billion euros, expires. Two issues, in fact, were floated in 2014, months before then radical SYRIZA won a snap election and formed a coalition government with a small rightist-populist party.
Dates for a possible test return to the markets, according to reports, is July 27 at the earlier, with an autumn date up next or what’s judged as the most favorable time, namely, in early 2018.
The earliest date being cited, July 27, will come days after a Standard & Poor’s credit rating review is scheduled to be announced on July 21, and assuming that the rating will be positive.
