Greece

The Greek government on Tuesday unveiled an ambitious draft budget for next year, the latest sign the country is making progress in its economic recovery after years of painful austerity and international bailouts, the International New York Times reported. The government projected that the economy will grow 2.5 percent next year, after a 1.6 percent anticipated increase this year, a further sign of Greece’s confidence as it looks to wean itself off the financial assistance it has relied on for the last eight years.

Greece, long the problem child of the eurozone, took a major step on Wednesday toward securing financial independence as it prepares to wean itself off the international bailouts that have kept it afloat for the last eight years, the International New York Times reported. The government’s announcement of a bond swap could help ease a staggering debt burden that at one point threatened to push Greece out of the eurozone.

There is almost no precedent for what has happened to Greece since 2008. Yet despite the salutary counterexamples of emerging markets that let their currencies float to provide monetary stimulus, Greece has thus far determined to remain a member of the euro area, the Financial Times reported in a commentary. Some attribute this to love: the latest Eurobarometer survey shows 64 per cent of Greeks support “a European economic and monetary union with one single currency, the euro”, while only 32 per cent are opposed.

The Greek government is planning an unprecedented debt swap worth 29.7 billion euros ($34.5 billion) aimed at boosting the liquidity of its paper and easing the sale of new bonds in the future, Bloomberg News reported. Under a project that could be launched in mid November, the government plans to swap 20 bonds issued after a restructuring of Greek debt held by private investors in 2012 with as many as five new fixed-coupon bonds, according to two senior bankers with knowledge of the swap plan. The bank officials requested anonymity as the plan has yet to be made public.

Greece is getting ready to exit its bailout program next year and the country is finally emerging from nearly a decade of financial depression and stagnation, the International New York Times reported on an Associated Press story. For most Greeks, however, the recovery is likely to be slow and painful as austerity measures will endure for years to come. That's particularly true for many startups, which the government has put its faith in to help the economy grow, but are burdened by red tape and the high taxes meant to pay for the country's debts.

Eurobank has become the latest Greek bank to tap capital markets, selling a covered bond that bankers say is designed to be eligible for ECB purchases, the Financial Times reported. The €500m bond, which matures in 2020, was priced this afternoon at a yield of just below 3 per cent. It represents the lender’s first foray into international markets in three years. Covered bonds, a centuries-old form of European financing, are issued by banks and secured against pools of loans. As such, they provide investors with additional security in the event of default.

Greece’s Eurobank is tapping the bond market for the first time in more than three years, becoming the country’s latest lender to sell a type of debt that may ultimately be bought by the European Central Bank, the Financial Times reported. The bank has hired a consortium of investment banks to sell a three-year covered bond as early as next week, as the broader Greek financial sector returns to international markets following a multiyear hiatus.

When Eurobank Ergasias SA, Greece’s third-biggest lender, recently went after a “strategic defaulter,” angry protesters stormed the courtroom to block its foreclosure attempt. The defaulter, whose name the lender won’t disclose, had not serviced its loans for the last five years and owed the bank 4.85 million euros ($5.7 million), Bloomberg News reported. Over the same period, it had collected about 6 million euros in dividends from its 41 percent holding in a food company, showing, according to the bank, that it could honor its commitments.

With just months left before Greece’s latest lifeline expires, all bets are off on whether it’ll need more support. Officials directly involved in the country’s bailout say they don’t have the stomach for another strings-attached aid program when the current one expires in August 2018, Bloomberg News reported. Worn out after seven years of endless cliffhanger negotiations, both Athens and its European creditors are keen to turn the page. That said, Greece needs to show it can go it alone while Euro-area creditors have to be sure they can recover their money.

National Bank of Greece has sold a €750m covered bond, marking the first time the country’s banking sector has tapped international capital markets since 2014. Covered bonds are issued by banks and backed by pools of loans, providing the investor with additional safety in the event of default, the Financial Times reported. The three-year bond, which is rated single B by Fitch, pays a coupon of 2.75 per cent. The yield on the Greek 2-year sovereign is currently at 3.14 per cent.