Monday 16 May 2016 12:07 am

Greece could return to global debt markets by 2017

Greece could return to the global debt markets as soon as 2017 if international creditors agree on the latest debt relief measures later this month Prime Minister Alexis Tsipras has told a Greek newspaper.

Speaking to Realnews, Tsipras also alluded that tapping into the markets would mean that "we might exit the bailout once and for all a lot before the programme expires in August 2018".

Although sitting on a debt burden expected to reach nearly double that of the country’s GDP, Greek 10-year bond yields fell below eight per cent for the first time in six months last Tuesday – a far cry from the 19 per cent yields experienced at the peak of last year’s default concerns.

Greece did manage to place €3bn of five-year bonds in 2014 and while a milestone at the time, it was not seen as a return to long term normality. Treasury bills remain Greece's main source of short-term funding.

On 24 May, creditors will meet to decide whether or not to approve the unlocking of the next tranche of funds that would enable scheduled repayment to the European Union and the International Monetary Fund.

Last week Greece voted in pension and tax reforms, part of a package agreed under its bailout. It remains a careful balancing act for Tsipras who was re-elected last September on promises to reduce the burden of austerity on the general public.

The government also expected to submit to parliament a further package of reforms that could include a set of indirect tax hikes, and regulations on Greek banks’ bad loans – a well-timed move that will help convince creditors to vote for the latest bailout release.

It is unlikely to have escaped the Greek government’s attention that Argentina – with whom a number of economic parallels have been drawn – managed a hugely successful bond launch last month. After 15 years in the wilderness, there was $65bn of investors vying for the $15bn on offer.

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