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Samaras Expects Better Rates Before Future Bond Issuance

Greek bond yieldsGreece is in no rush to jump back into the markets fully despite the recent sale of a 3-billion-euro five-year bond, Prime Minister Antonis Samaras said, adding that he expects eventual future issues to yield lower interest rates than the 4.95 percent rate at which it sold debt last week.
Samaras slung to his view that the economy will begin to recover this year from a crushing economic crisis caused largely by his New Democracy conservatives and its coalition partner, socialists PASOK, spending wildly for decades and hiring hundreds of thousands of needless workers in return for votes.
Pressured by international lenders who’ve put up 240 billion euros ($330.7 billion) in two bailouts since 2010, successive governments have imposed harsh austerity measures he says have worked to corral overspending and brought a primary surplus and that he expects a fiscal surplus as well by next year.
While pay cuts, tax hikes, slashed pensions and worker firings have created a record unemployment rate and deep poverty, Samaras has been pointing to other economic indicators he said prove he’s been right to implement the reforms he opposed when out of office.
The 4.95 percent interest rate Greece got was better than the five percent expected but still high enough to bring a bonanza in profits for investors. However, analysts said the country needs lower interest rates to be able to recover and not tie itself into perpetual debt servicing.
In an interview with financial news agency Bloomberg, he said he expects Greek bond yields to decline further and signaled he has no immediate plans to sell more debt.
“We anticipate bonds and T-bills’ interest rates to decline, and further enhancement of liquidity through investment and privatizations,” Samaras said, although there’s been relatively little interest from foreign investors and almost none in state enterprises that are on the market.
“We didn’t want to borrow any more than we needed,” he said. Most of the money in Greece’s rescue packages from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) will run out this year, leaving the country at the mercy of  the markets.
Greece set off Europe’s debt crisis in 2009 when the government revealed its budget deficit had ballooned to more than five times the Eurozone’s three percent ceiling, leading to the need for the bailouts which came with the conditions that have sparked protests, strikes and riots to no avail.
Some money is now flowing back in as speculators hope to cash in on quick profits and ignore the country’s long-term debt problem. Samaras said economic indicators show that Greece can survive on its own although the government had to negotiate reforms earlier this spring to get release of a pending 8.3 billion euro ($11.45 billion) installment.
“We don’t need more money. We have no fiscal gap, we have no financing gap and, on top of this, we have the ability to go to the markets if necessary,” he said. “We reached rock bottom and now we can only go up and we will only go up,” said Samaras, who holds a Master’s Degree in Business Administration from Harvard University.

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