Investors unsure on Greek stability

INVESTORS showed scant faith in Greece’s ability to cut its colossal debt after an auction yesterday that handed insured holders of defaulted bonds a large payout.

The auction set a price of €0.215 in the euro for a selection of Greek bonds, broadly in line with expectations and the best guide yet to the fair value of new bonds issued in a deal to cut Greece’s debt by €100bn (£83.3bn).

The new price – effectively the amount investors expect to get back on the bonds – was a clear sign investors do not believe the second international bailout has put Greece on a solid financial footing.

Meanwhile the country’s central bank stressed it is vital the government honours its promises to reform the economy if it is ever to regain the confidence on investors.