GREECE IS preparing a make or break return to the financial markets next month. It plans to raise about €4 billion in its first borrowing attempt since last month’s bailout by the European Union and International Monetary Fund.
Petros Christodoulou, head of the Greek debt management agency, said: “Our intention is to roll over three-, six- and 12-month treasury bills maturing in July.”
The EU and IMF have approved the rollover of short-term debt in July and October this year under the terms of a €110 billion loan agreement with Greece. However, investors warned the move may be a gamble as a poor auction could harm sentiment. The big test is how much Athens will have to pay in interest rates to attract buyers.
Unsustainably high premiums would alarm investors. Steven Major, head of fixed-income research at HSBC, said: “Confidence is fragile at the moment and any bad news out of Greece could trigger a further crisis.”
The Greek government is betting that confidence will improve before the bond auctions on July 13th and 20th as reforms of the state pension system are to be approved next week. – (Copyright The Financial Times Limited 2010)
