Greece Macro Monitor (15 January, 2014)
Funding gaps, OSI and why Greece’s aim to access wholesale funding markets in 2014 constitutes a reasonable (and conditionally feasible) proposition
In this report, we take a close look at some important aspects of the agenda of the upcoming negotiations between the Greek government and the troika in the context of the present (4th) program review. In addition, we offer an updated analysis of projected financing gaps in the years ahead and highlight a number of potential sources for their coverage, including a new debt relief package by official lenders (OSI) expected later this year. We finally look at the evolution of gross (and net) government borrowing requirements across euro area Member States and, on the basis of the recent bond issuance history in Portugal and Ireland, we explain why the Greece’s stated aim to approach wholesale funding markets with a small 5-year bond issue in 2014 constitutes a reasonable (and conditionally feasible) proposition.
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