During the one-year treasury bill auction held on 9 September, the Greek Public Debt Management Agency (PDMA) borrowed without interest for the first time ever in a 52-week debt issue.
Athens, Greece: 09 September 2020
On September 9th, the PDMA issued € 625 million in debt in a 52-week treasury bill auction. Total bids submitted were € 1.633 billion, meaning that the offer was oversubscribed 2.61 times. PDMA accepted € 812.5 million at an interest rate of 0%.
According to Scope Ratings, although the pandemic put a sudden stop to the Greek economic recovery, the strong response by the European Commission, the European Central Bank and the government has improved the long-growth prospects of the country and the sustainability of the debt.
Scope Ratings forecasts that the combined impact of these factors is likely to contain the Greek GDP contraction in 2020 and contribute towards the recovery in 2021, with Greece’s gross domestic product recovering by 5.2% next year after a 7.8% fall this year.
We note that five years ago, at the height of the Greek financial crisis, the idea that Greece would be able to borrow at zero interest rate would have been considered impossible.
For further information, please contact:
Philip Ammerman
Managing Director
Sources:
Public Debt Management Agency. 9 September 2020
Kathimerini. 9 September 2020
Scope Ratings. 9 September 2020