-Yannis Stournaras, Finance Minister
Greece– one of the main reasons for the most severe economic recession in Europe, is back now. Athens is planning a return to financial markets to raise debt, possibly as early as this week. During its first bond issuance in more than four years, Greece expects to raise around 2 billion euros in five-year debt, highlighting the turnaround of the highly indebted country. Global investors are looking for higher interest rates, giving a chance to Greece to prove the country still can operate as a normal functioning country that is able to raise its own finance. Despite opportunistic move, investors will have to keep in mind Greece's 2012 default. The nation's Prime Minister Antonis Samaras plans to pull off a first successful bond issue ahead of May's European elections. The timing can be perfect, as bloc's bond markets have performed a strong rally since last December. At the same time, yields turned lower after Draghi's comments and pledge to consider fresh stimulus measures like the U.S.-style quantitative easing.
Greece 10-year government bond yields stand below 6.2%- the lowest since 2010. While the finance minister claim the country should not return to the debt market immediately, the economy can take the advantage of the momentum. A return to capital markets will boost investors' confidence in the future outlook, proving all the implemented reforms have helped to stabilize the economy.
© Dukascopy Bank SA