The value of Greek bonds purchased by the European Central Bank (ECB) under the pandemic program (PEPP) now reaches 35 billion euros (34.935 billion euros).
According to the latest data published by the ECB, within a month (from 21/10 to 21/11/2021) the Central Bank bought from the secondary market Greek government bonds worth 2.749 billion euros, thus contributing to the enhancement of liquidity but also to the maintenance of nominal interest rates at a low level. After these last purchases, the ECB now holds approximately 52% of the so-called “reference bonds” of the Greek State.
The reference bonds do not include SMP-ANFAS bonds or bonds left by PSI after the exchange in 2017 as well as private placement with banks. The total number of bonds traded on the market – and designated as eligible by the ECB – amounts to approximately € 93 billion, according to the latest figures from the General Accounting Office. Therefore, the ECB holds 37.6% of the Greek Public Debt (294 billion euros), the rest of the debt consists of IMF loans, transnational and ESM loans granted under the Memoranda.
The ECB has exhausted its flexibility in implementing the pandemic program, which ends in March. This means that it applied several flexible criteria, especially in the case of Greece, when buying bonds. The ceiling of the markets is determined by the so-called key of each country, which in the case of Greece has been set at 2.47% (euro system key). However, the rule that remained unbroken was that which did not allow the ECB to hold more than 50% of any specific category (eg 10-year maturity) of bonds.
The “fate of Greek bonds” for the post-PPPP era remains uncertain as they can not be included – in the absence of an investment grade – in any of the ECB’s programs which will continue after next March. On December 16, when the Central Bank Board of Directors meets, some decisions are expected to be made on how the ECB will move from now on, in the light of new data that apply to both the inflation and the pandemic front.