By Paul Hannon
Bond investors appear to have given the Greek government’s new austerity plan their cautious approval Thursday, buying €5 billion of 10-year bonds at a price that the government itself probably views as too high–but seems reasonable under the circumstances.
The banks employed to sell the government’s bonds accumulated orders totaling €14.5 billion, according to the country’s Debt Management Agency. But they and the agency wisely decided not to try to raise too much money in one shot.
If it is to make it through the year without taking financial help from either the European Union or the International Monetary Fund, Greece will be a regular visitor to the bond markets. What it needs is a soild, steady pace of issuance that gradually lowers its cost of borrowing; not another apparent blowout deal that quickly goes sour for investors, which is what happened in January.
The drama is far from over. But at this stage it appears that the government has a plan and may have the steadiness of purpose to carry it through.
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