The fiscal outperformance of 2023, the outstanding performance in primary surplus and debt reduction together with positive outlook from S&P in the Greek economy, it was a window of opportunity that should not be wasted.
Such a positive moment for Greece to enter the markets, perhaps even today if conditions permit, and indeed with 30-year bondthe first of the 2021, we might not find in front of us again. The above played a very crucial role in the decision for the country’s second major exit this year, after its issuance 10 years old in January.
In the timing, however, he counted something else very seriously. The fact that from now on the path ahead is paved with political thorns, the two most critical 2024 elections promise shocks, the foci of destabilization in the pulsator are solidified.
The European elections of June 9, the risk of the rise of the extreme right, more demagogues and populists in the European Parliament, can easily cause turmoil in the markets. No one can assure that the result will not be such that they will not be affected. However, the combustible material for social and political processes, which are also fueled by geopolitical developments, is there.
The other answer to why “now” is connected to the American elections of November. Memories of the upheaval his warning had caused in Europe are still fresh Trump to its member countries NATO for their military expenditures.
That is, according to him, for a state to receive help from the US in the event of an attack by the Russia (based on Article 5), should have met the agreed defense spending target of 2% of GDP of. At least 19 from 30 NATO members spend less, according to 2023 figures.
Any election of Trump and his insistence on this issue could even blow them up fiscal accords and sustainability plans of debt which have made many major European economies.
In such a dystopian scenario, the EU could enter a vicious cycle of turmoil and uncertainty, which in turn would lead to volatility in markets.
In other words, no one guarantees that after June and with upcoming elections of USA, international conditions will be better than today in order for Greece to gain another message of confidence from foreign investors.
After all, it’s his job Public Debt Management Organization (PDO) is to “see” risks and try to hedge against them even if they never happen. And in this case, the probability of an increase in risk compared to today is quite high.
Roughly speaking, this is the rationale behind the choice of the current juncture by the government and ODDIX for the first in three years, a 30-year edition.
Movement, which is not done to cover the State’s financial needs. These are covered. The 35.2 billion euros available and the gross financing needs 5.8% of GDPwhen in Italy move to 27-28% of GDP, as well as the 20 years average duration of the debt, are conditions that you only meet in a few countries.
What ODDIH does is to rebuild it debt curve of Greece, to improve it with new supplementary editions, to add a new important point, the 30 years.
Greece is now in a new era, that is, having recovered it investment gradehas two options: Either to continue to issue shorter-term issues and to “open” existing ones to improve their liquidity, which is what ODDIX does anyway every month through the auctions.
Either to complete the curve by introducing new points, such as the three bond issues in the last year, a 5 years oldone 10 years old and one 15 years old. The only ones he hadn’t issued were 20 years old and 30 years old. And because the goal is to “build” one as much as possible long point, choose her 30 years.
In the last forty years, Greece has “built” 5 times its debt curve. The first was from floating and fixed interest rates during the period 1997-1999. The second was during the transition from the drachma to the euro (1999-2010), the third started with PSI the 2012 and completed the 2017the fourth covered the period 2018- end of 2022 and the fifth concerns the new era. With Greece at investment grade, i.e. from the end of 2022 onwards.
Every country and especially us, after what happened in the decade of the crisis, the deterioration of the Greek economy and the lost trust from our creditors, must maintain the curve with new money transaction. With new issues of debt in five or six emblematic points, starting with 1 month and ending them 30 years.
In other words, it is necessary that our lenders (investors, organizations, banks) trust us again now that we have again been promoted to the reliable states, in this new era that we are going through as a country, of category change with investment grade. It’s not self-evident.
