While talking to the Financial Times, the head of the Greek Public Debt Management Agency (ODDH) presented his arguments in favor of Greece returning to international capital markets, stating that this action will strengthen the confidence of markets and will also reveal the strengths of the Greek economy.
Stelios Papadopoulos mentioned that he doesn’t share the concerns expressed in private by Greece’s international creditors about the intention of the Greek government to raise funds again from international investors. The gradual return will allow for the creation of a bond market, which will function smoothly and encourage the return of long-term real investors.
“We believe that the economic future of Greece, not its past, will be the determining factor as institutional investors will examine the country’s return to markets carefully,” said Papadopoulos.
The troika, however, which oversees the country’s reform agenda, has expressed fears that such a move would divert Athens from implementing important fiscal and financial reforms.
Papadopoulos said that Greece’s return to markets will focus, at the beginning at least, in recovering the depth and the liquidity of the bond market while issuing small bonds. The institutional partners of Greece “want to see that Greece regains access to markets in a reliable and permanent way,” said the ODDH head, while adding, “Greece will post a current account surplus that will surprise many and will return to growth within 2014.”
While the turmoil in other emerging markets triggered a violent devaluation of currency, the participation of Greece in the eurozone reduced any foreign exchange risks. The average Greek debt maturities are 17 years, which is very high according to international standards, and only €29 billion are held by private investors.
Last month, Greek finance minister Yiannis Stournaras mentioned to the FT that the government may try to test the markets during the second half of 2014 with issuing €1.5 to €2 billion 5-year bonds.
Papadopoulos said that “this will help to highlight the comparative value of Greek titles and facilitate the issuance of corporate and banking titles, while paving the way for a more comprehensive return to markets at the end of the journey,” not providing though any further details on the timetable of the Greek return to markets.
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