While Greece may have side-stepped immediate funding catastrophe with its successfully placed five-year bond issue, that’s not to say there aren’t further trials for the sovereign issuer down the road.
For example, here are some of the challenges facing Greek finance minister Georges Papaconstantinou in the not-too-distant future, according to Barclays Capital:
10 February: National strike. The strike’s intensity and politicians’ reactions may provide a first impression about the government’s ability to implement fiscal reforms.
16 February: EU Council officially reacts to Greece’s 2010 budget (after hearing assessments by EU Commission as well as ECB).
March: Greek Parliament to vote on Tax law and details of spending cuts.
April-June: EU assessment on Greece’s budget implementation and decision whether stricter recommendations (not yet “sanctions”) are taken under the “Excessive Deficit Procedure” (EDP). EU will undertake assessments on the implementation of fiscal measures very 3-6 months. In parallel, the Greek Treasury faces the first large redemptions of the year in April and May and is likely to issue in advance of these dates.
January 2011: ECB is expected to return to regular collateral procedure. This implies that Greece would need an A- rating from at least one of the agencies. Currently Moody’s has Greece still two notches above the critical threshold, but under negative outlook.
And if that wasn’t enough, here’s the decision labyrinth Papaconstantinou faces in terms of Greece’s fiscal adjustment, also courtesy of Barclays Capital:
Related links:
That European funding problem, charted – FT Alphaville
The sovereign debt premium – FT Alphaville
The sovereign ‘Northern Rock’ funding model – FT Alphaville
Treasury ΣTCHings – FT Alphaville
沒有留言:
張貼留言