According to a recent report published by Reuters, Greek bond yields rose to their highest level in two months, since Greece’s plan for an early exit from the bailout program has raised concerns among the lenders on future financing and debt relief.
“The plan is a gamble for Greece as it makes a tentative return to bond markets after its 2012 default” the article mentions stating that borrowing more from the markets might leave investors exposed to further losses, if another debt restructuring is needed – especially if the supervision that comes with the bailout program stops.
This concern was depicted yesterday, when “Greek 10-year yields rose 41 basis points to 6.57 percent, their biggest one-day jump since mid-May”, as Reuters reports.
“While we are seeing the Greek economy gradually improving, it’s still very weak and there are lot of vulnerabilities. For Greece to exit its bailout early is causing a lot of concerns in the market in terms of its debt sustainability and how it would fare without any external support” said Sarah Pemberton, European economist at Capital Economics.
In the meantime, SYRIZA’s leading over the coalition government, as recent polls have showed, raises more concerns and worries the lenders, since Greece might proceed to early elections.
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