Critical meeting of the ECB on Greek bonds


Critical is marked as the week for the monetary policy that will be followed by central banks around the world and in particular the ΕΚΤ, as on Wednesday and Thursday the Eurozone Central Bankers are asked to answer the crucial question of what they will do after the Spring of 2022 when the Extraordinary Bond Purchase Program (PEPP), which was activated to support the European economy in the midst of the pandemic.

For Hellas the ECB decision he’s got greater gravity, as the economy does not have an investment grade and therefore based on the forecasts to date Greek bonds may not be included in the permanent quantitative easing program (APP). In fact, tomorrow’s decision, if taken and not postponed to early next year, as inflation, rising energy costs and the Omicron mutation continue to push the eurozone economies fiscally, he said. the future of Greek bonds and hence the future of returns but of his profile Greek debt.

However, even in this perspective, the question remains whether these markets will be able to prevent the pressure on Greek bond yields, so that the country can continue without unpleasant surprises in terms of borrowing costs to implement the program of issuing new bonds and the new year.

However, according to information from Frankfurt, no final decisions may be taken on the Greek issue and not only, although a clearer position would help to the maximum, so that the markets continue to behave favorably towards the Greek debt. The consultations, however, are continuous and feverish at the same time that every effort is made by the Greek side in order to send the right messages so that markets and rating agencies have the supplies that will eventually lead them to the coveted investment upgrade.

In this context belongs the successful as everything shows its completion Bond swap program. The Public Debt Management Agency secured acceptance of 72.16% in its proposal and essentially early repayment of debt of 1.1 billion euros but also an extension (through the issuance of new bonds) of 1.84 billion euros by about 2.5 years.

In particular, this is an early repayment of a total debt of approximately 1.1 billion euros through a bond exchange program (Bond Swap) that were “in circulation” under the PSI of 2012. They also proceeded to bond exchanges totaling 1.841 billion euros , which ensures further extension of the debt repayment curve. In total, the exchange program announced last week involved the exchange or early repayment of bonds totaling 4.05 billion euros, with the response eventually reaching 2.92 billion euros. The response, that is, reaches the percentage of 72.16%, as mentioned in the relevant announcement issued by the Public Debt Management Organization. Cash will be paid for the acquisition of 1.1 billion euros, while four new bonds with maturities from 2027 to 2037 will be issued for the exchange.

However, it is also expected to support Annual Report for the European Central Bank for 2021 voted in favor by the European Parliament ‘s ECON Committee, which calls for the inclusion of Greek bonds in the ECB’ s asset purchase programs, long before the completion of the emergency pandemic program in March 2022.

The European Parliament’s Annual Report for the ECB’s Annual Report was appointed by the Coordinators of all Political Groups in the Committee on Economic and Monetary Affairs (ECON), the Vice President of the European Parliament and Head of the SYRIZA Eurogroup – Progressive Alliance Dimitris Papas. The report was adopted by 49 votes in favor, 8 against and 1 abstention in the ECON Committee of the European Parliament.

The report is expected to be adopted in the presence of ECB President Christine Lagarde in plenary of the European Parliament on February 2022.

Reportage: Dr. Konstantina Dimitrouli

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