ATHENS – Despite floating a bond for the first time in four years – and planning more as the economy shows signs of a recovery – Greece is still reportedly going to ask its international lenders for a 50-year term to repay 240 billion euros ($330.7 billion) in bailouts.
The country has been surviving since 2010 on the rescue packages but Prime Minister Antonis Samaras said the successful sale of a 3-billion euro, five-year bond and a primary surplus that could be as high as 2.3 billion euros shows Greece won’t need more aid after it runs out, most of it this year.
A finance ministry official told Reuters that Greece also wants a lower interest rate and to change from a floating rate to a fixed rate.
The government, at the same time, has set aside a bill providing debt relief to indebted Greek households crushed by harsh austerity measures demanded by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB).
Deputy Finance Minister Christos Staikouras said that Greece is expected to beat a 2014 budget target and may tap bond markets again with an issue of between 3-6 billion euros to plug any potential funding gap over the next 12 month although the government earlier said there wouldn’t be one.
Athens sees a primary budget surplus of 2.3 percent of GDP this year, exceeding a target of 1.5 percent of GDP set by the European Union and IMF, Staikouras said.
Primary surplus figures refer to the budget balance before interest payments, the cost of running cities and towns, social security, state enterprises and some military expenditures, which otherwise would show a deficit.
“The mid-term plan for 2015-18 marks the country’s path towards economic recovery and growth and towards maintaining substantial and sustainable primary budget surpluses,” Staikouras said.
Staikouras claimed that “Greece has entered a phase of fiscal stability, an achievement that is due to the great sacrifices of the Greek people”.
The government has been beating the Troika goals but debt is still an unsustainable 175 percent of Gross Domestic Product (GDP) and pay cuts, tax hikes and slashed pensions have created record unemployment