Analysis. The Syriza government signaled it may soon issue billions in bonds to show that it can return to market financing.

Greece may soon be on its own financial footing again

The government of Alexis Tsipras wants to send a strong signal to European partners and others: Greece is emerging from recession and is preparing to walk again on its own feet. Of course, the process is very complex and is full of pitfalls.

After the European Commission a few days ago called for the closure of the procedure against Greece for excessive deficits, the Syriza government is studying the possibility of issuing government bonds again to show that the country, slowly but steadily, can again finance itself on the market, and meet its needs independently, without aid and external support.

On Monday, everything was ready, according to the Greek press, for the issuance of a five-year treasury bond, with an interest rate of around 4 percent. The aim was to secure an offer of around €4 billion. In the end, however, prudence prevailed, and sources at the Hellenic Presidency of the Council have made it clear that the government is following the developments in the markets and will decide when the country will return, not based on rumors, but on “the best possible management of the Greek debt.”

Therefore, they do not want to risk creating a climate of uncertainty, also taking into account the fact that on Thursday, the International Monetary Fund is planning a meeting in which the participation of Greece and the last phase of the support plan for the country will be discussed in detail. As has already been disseminated from Washington, on Thursday a study of the Fund will be presented, in which it endorses the position already expressed a long time ago by the international body led by Christine Lagarde. And that is that “the Greek debt cannot be considered sustainable.”

On one side, this thesis will provide additional support to the Tsipras government’s position, which has always called for substantial debt relief. On the other side, however, it could create some fibrillation, and that’s why Athens would have preferred not to risk a return to the markets at this time.

Commentators point out that with the aid tranches released recently, Greece can meet its financial obligations until the end of the year, and so, for now, there are no reasons of particular urgency for the immediate push to issue government bonds. But it is also true that the Greek government wants to give the signal that the most difficult period of the crisis is behind it, and that’s why as soon as possible — maybe even in the short term — it will return to consider “the market option.”

Meanwhile, Tsipras is focusing on combating unemployment, a crucial problem. After meeting with the Labor Minister Efi Achtsioglou, the Greek prime minister stated that, from now on, the objective of the government is to reduce the unemployment rate by 2.5 percent annually.

“Now we are realistically optimistic with regard to the fight against unemployment,” said the Syriza leader. The overall rate is still very high. It is on 21 percent, but it is also true that this is the lowest level recorded over the past five years. Compared with April 2014, there was a decline of five percentage points.

Tsipras’s objective at the same time is to fight illegal employment, a phenomenon which during the crisis years has assumed disturbing dimensions. For this purpose, the labor inspectorate announced a tightening of controls. The cuts to pensions and salaries imposed by creditors should finally be over.

And the government led by the Greek Radical Left Coalition now tries to put emphasis on the guarantees and protection of the weakest, to regain the lost consensus and not give the right party New Democracy the opportunity to talk about social status and respect for rights. Provided that German Finance Minister Wolfgang Schäuble and his allies allow the country to breathe and move within those boundaries of freedom granted to all democracies.

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