Just as things started turning right for the perspectives of the Greek economy, new shallows point ahead.
Things turning right: the yields of Greek paper, from 10-year bonds at 3.76%, the 5-year one at 2.85 down to treasury bills issued at a 0.99 interest rate; S&P increased its rating from B- to B, with a positive outlook (with Fitch and Moody’s to follow); last Fridays’ teleconference EuroWorking Group gave a green light for the January 22 Eurogroup to accept that the third review of the current Programme was more-or-less accepted as complete.
So, what are the shallows? First, if the Eurogroup proper gives now the thumbs-up, the disbursement of the next financial aid tranche (to pay for interest coming due in the first half of 2018; clear the arrears of the Treasury to businesses or individuals; to add to the cash buffer built for Greece’s final exit to the markets) may well be made in sub-tranches and be further conditioned to the effective application – as opposed to legislation – of specific measures, such as auctioning off mortgaged assets.
Then, as EWG departing director Thomas Wieser made it abundantly clear in a farewell interview (to the Athens News Agency) the matter of agreeing a precautionary credit line – or a hybrid support programme – for Greece after the end of the current Programme is far simpler than politics make it look. If the country feels it is wise to have a stand-by support mechanism, then it will ask for it (and it will be probably granted); if it doesn’t, it will go it alone (and carry the whole risk).