Greek spread at record thirteen year low

The spread between Greece and Germany has dropped to just 98 basis points.

The spread between the two countries’ 10-year bond yields is now at its lowest level since 2008 and the onset of the global financial crisis at that time.

The sustainability of the Greek debt, which is also based on the decisions of 2018, in combination with the reform policy of the government seems to have contributed to a great extent to the above

Without a doubt, the eligibility of Greek titles in the  ECB ‘s extraordinary quantitative easing PEPP program has helped keep Greek yields low

In addition to the good profile of the Greek public debt, there is also the factor of large cash reserves (approximately 32 billion euros), which give additional confidence in the course of the Greek economy, which is reflected in the country’s frequent recourse to the markets.

It is a fact that Greece currently has a wide “arsenal”, which concerns both the profile of the Greek debt and the “smart” strategy of the Public Debt Management Agency and the financial staff during the pandemic, keeping the cash reserves high, issuing bonds often in historically low-yield markets, and improving debt sustainability.

Currently only 10-year bonds in Germany, the Netherlands and Switzerland have negative returns compared to more than 10 countries that had negative interest rates a few months ago. In addition, Greek bonds in all maturities have a negative spread compared to their Italian counterparts, which means that their yields are lower. Today the yield of the Greek 10-year bond is set at 0.841%.