Mixed signals were given out over the near – as well as the not-so-near – future of the Greek economy. The yields of Greek bonds went sharply down, soon after the large swap of some 25 bn of PSI-related Greek paper was successfully completed two weeks ago, getting lower than pre-(de facto)default levels, at 3.95% for the 10 years’ benchmark bond. The pronouncements of EU worthies are getting more and more encouraging as to the progress of the current Programme review and the perspectives of Greece exiting its custody period after 8 years and 3 successive Adjustment Programmes.
Then again, Mario Draghi kept refusing to extend to Greek bonds access to the (dwindling) Q.E. programme of the ECB, which is now stretched to the point of getting on-board even corporate junk bonds; more troubling was the fact that Super-Mario mentioned (in a benevolent way, but who will explain that to Greek public opinion?) that a further Adjustment Programme – the 4th – might be forthcoming. While the designed successor of Jeroen Dijjselbloem to chair the Eurogroup, Portuguese Finance Minister Mario Senteno, reiterated the tough/Schaeuble position over Greek debt relief: only after the current Programme is completed would such a perspective arise.
Mixed signals, indeed!