Athens returns to the financial markets

Roughly a year before its third bailout package comes to an end Greece has returned to the financial markets. After a three-year absence Athens issued a five-year bond on Tuesday and accrued around three billion euros. Despite this success many journalists still believe the country has a long way to go before it attains its goal of financial independence.

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Financial Times (GB) /

An important step towards normality

Greece's return to the capital markets is good news indeed, the Financial Times comments:

“Yesterday's bond sale suggests investors are becoming more confident that Greece will persist with painful reforms; and that despite the political obstacles, creditors will eventually assent to the debt relief needed to put the country's finances on a sustainable footing. ... Greece's return to bond markets is no panacea but it is a welcome sign of returning normality; and after so many false starts, it could provide a much-needed boost to confidence.”

Neue Zürcher Zeitung (CH) /

Back to 2014

By contrast Panagis Galiatsatos, economic correspondent for the Neue Zürcher Zeitung, sees little cause to celebrate:

“In reality Greece is just back where it was in April 2014. Back then Athens ventured a return to the markets under comparatively difficult conditions. The ECB didn't have a quantitative easing programme in place and the interest rates in the Eurozone were higher than they are today. In Greece itself a radical opposition was on the rise and making investors nervous. Today in contrast there is no political risk, the conservative Nea Dimokratia - which is the undisputed leader in the polls - is seen as pro-markets and in conformity with the programme. Back then too, the emission was successful. … But the success didn't last, nothing came of it. So any stockbroker with a little Greece experience will have doubts about whether this time will be different.”

Der Standard (AT) /

Even the smallest turbulence could be fatal

Der Standard has its doubts about the move and warns that there are still many hurdles to be overcome on the path to normality:

“For Greece and the Eurozone the trust of the bond subscribers is a positive signal. In just over a year's time the country is supposed to be able to get by on its own once more without the help of the monetary union and the IMF. But there is no cause for euphoria. The success of the emission is largely due to the hunt for yields, which has long since taken on worrying proportions. It would take only minor economic or political turbulence to cause the fragile financial infrastructure to collapse.”

To Vima (GR) /

A long and winding road

In its online edition To Vima looks back at the painful process that preceded the return to the capital markets:

“The government may be celebrating today but we all remember the absurdities of its policies. … It took new austerity programmes and massive burdens for companies and citizens for it to recognise how useful it can be to borrow money from these damned markets. It took three years for Tsipras and the other leaders to learn the art of governing at our expense for us to be able to borrow money once more. On terms that are very different from those that generally prevail on the international markets.” (GR) /

Tsipras has achieved his goal

Web portal Protagon laments that Greece won't get money for far lower interest but is still delighted by the move:

“If we hadn't caused the 'accident' of 2015 [with the referendum and capital flow controls] we could have long since been borrowing money at a similar interest rate to Portugal. The current interest rate on Portuguese five-year bonds is 1.25 percent. This could also have applied for us. … But it's important to stress the achievements of the government: its absolute compromise with the troika has chased off the monster of populism so carefully cultivated by popular leaders in recent decades. And this is probably the greatest reform of all.”

Kathimerini (GR) /

Far from back to normal

The English-language version of the daily Kathimerini stresses that the return to the markets doesn't mean the country is out of the woods:

“We all want a return to normalcy and the country certainly needs it. However, one bond issue or the completion of a review of the implementation of the bailout program are not enough. For the country to become normal, it needs strong institutions that work well. Investments inside and outside of Greece need a functioning judiciary, security and rules that apply to everybody. Institutions are what shield a country from uncertainty. ... The current government does not appear to understand this very basic notion.”

Ta Nea (GR) /

Beware of boomerang effect!

Kostas Botopoulos, an expert on constitutional law, warns in Ta Nea about the risks of issuing Greek government bonds:

“It's no mere coincidence that politicians recommend doing a test run first, while the overwhelming majority of economists believe it's too early for such a step. … Since market prices for Greek bonds will certainly be far higher than what our country pays for loans through the bailout programme, it's vital to ensure that this test issue doesn't backfire. We'll be laughing on the other side of our faces if the creditors say: Now that you're making a profit and back on the markets you can get along without our help.”

Naftemporiki (GR) /

Athens must not squander its credibility

The return to the bonds markets is nothing but a PR gag staged by the Greek government, Naftemporiki criticises:

“Government officials have created high expectations in recent days. … Whether Greece returns to the markets next week or not doesn't really matter. There is no real reason to do so from an economic point of view so public relations or domestic policy are the only motivation. No one is actually interested in whether the current government can achieve more favourable yields than the previous one under Antonis Samaras. So what is important now? To preserve the credibility and trust that the country has build up after so many sacrifices amounting to billions of euros.”