Wednesday, July 26, 2017
Greece Still Hasn't Turned the Corner
July 26, 2017
Greece returned to the private debt market this week for the first time in years, raising 3 billion euros at a relatively affordable interest rate of 4.6 percent. That’s encouraging news -- but it doesn’t mean the euro zone’s most flattened economy is on course for sustained growth.
The economy is showing signs of life, growing a bit in the first quarter, and the government has gotten a tighter grip on the budget. But Greece’s long-term debt position is still dire, and its deeper structural reforms have barely begun. Greece hasn’t yet put its problems behind it.
Investors are apparently willing to take an optimistic view of their likelihood of getting repaid. The International Monetary Fund has helped fuel this optimism by approving “in principle” new assistance to Greece, which serves as a seal of approval for its policies and those of its euro-zone official creditors.