Amid pandemic, Greece raises 2 billion euros in 7-year bond

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A elderly man wearing a face mask to protect from coronavirus pulls his shopping trolley at Varvakios meat market in Athens, on Tuesday, April 14, 2020. Eating lamb, usually roasted whole on a spit, is traditional for Greek Easter, which is by far the most important religious holiday of the year in this predominantly Orthodox country. Due to lockdown measures taken to prevent the spread of the COVID-19 this year, the government has said traditional family gatherings cannot be held this Easter on Sunday, April 19. (AP Photo/Thanassis Stavrakis)

ATHENS, Greece (AP) — Greece raised 2 billion euros ($2.2 billion) Wednesday with a 7-year bond auction, a result the government hailed as confirmation of market confidence during difficult times created by the coronavirus pandemic.

Greek Finance Minister Christos Staikouras said the issue carried a 2% yield, and he described the outcome as satisfying given that a similar issue in July 2019 “in a much better economic environment” carried the same yield.

Greece decided to tap markets taking advantage of an improvement in borrowing rates driven by massive European stimulus packages to address the impact of the coronavirus.

Staikouras has said he expects the economy to contract by 5-10% this year due to the effects of the pandemic before rebounding in 2021.

Greece is particularly dependent on revenue from tourism, an industry that has been clobbered by travel bans and other restrictions to curb the spread of the virus. The pandemic is expected to significantly increase unemployment — already the highest in the European Union at more than 16%.

The International Monetary Fund has projected a 10% recession for this year, and a rise in unemployment to 22%.

The government said Wednesday’s bond issue, Greece’s second of the year, was aimed at continuing to normalize the country’s access to bond markets following eight years of international bailouts that ended in 2018.

“Greece has proved that it can succeed, even under adverse circumstances,” Staikouras said.

The country issued a 15-year bond in late January. The yield on Greece’s 10-year benchmark bond dipped to historic lows of below 1% in February but soared to 4% weeks later amid global market panic surrounding the pandemic. The yield on Wednesday was at just over 2%.

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