To take the country out of the decade long financial crisis, the newly appointed conservative government issued of a 7-year bond. Greece’s Public Debt Management Agency issued the notice on Monday, sharing names of the banks who would manage the auction. PDMA announcements are usually made on the day of the auction.
Authorities planned the launch to tap financial markets to lower its fiscal deficit. Greece sets the target of 2.5 billion-euro ($2.8 billion) to be raised from its latest bond issue, to meet market borrowing requirements for 2019. Government is confident about the success of the bond as prior to this one, government successfully auctioned 5-year and 10-year bond earlier this year.
Earlier this month, Greece elected Kyriakos Mitsotakis as its new premier. Mitsotakis is a centre-right candidate committed to get the country out of financial slump.
The Greek economy has been suffering from economic crisis for over a decade. The economy reached its lowest between 2008 to 2016, plummeting 28% leading to high unemployment rate, sending many into poverty.
Athens has been running in huge debts since 2009, as the country closed its door for international markets. Greece has taken three bailout loans worth €289bn, £259bn, $326bn, with last one in 2018, from the European Union and the International Monetary Fund. It owes European Financial Stability Mechanism and European Stability Mechanism 168 billion euros, Eurozone governments 53 billion euros, Private investors 34 billion euros, Greek government bond holders 15 billion euros, European Central Bank 13 billion euros and IMF 12 billion euros.
In total Greece has received loan of nearly 320 billion, out of which as of January 2019 it has repaid only 41.6 billion euros.
The country has adopted austerity measures, imposing heavy tax cuts and lowering the pensions and controlling unions from stalling work. But due to huge debt investor trust in the country’s has gone down significantly, which stands as a major challenge in rebuilding its economy.
A Harvard pass-out and a former McKinsey consultant, during his election campaign, proposed that he could convince Greece’s creditors to agree to relaxed fiscal targets with “a comprehensive reforms package”. He avowed to make Greece a stronger and resilient economy, with the power to claim ” in Europe what it deserves and not be a beggar or poor relative.”