Greece could borrow from bond markets next year if its recession ends and the government delivers a primary budget surplus, Finance Minister Yannis Stournaras said.
As soon as Greece achieves that surplus, it will also get further debt relief under the terms of its bailout agreements with the euro area and International Monetary Fund, Stournaras said in an interview on state-run Net TV broadcast today.
“Out of necessity we have to return in 2014 because at the end of 2014 we will run out of money from the program,” Stournaras said. Greece needs to have a primary surplus and positive rates of growth to be able to achieve this, he said.
Greece has been unable to sell bonds since March 2010 after the size of its budget deficit forced it to turn to the euro area and IMF for 240 billion euros ($316 billion) of loans as part of two bailouts. The yield on 10-year bonds due closed below 10 percent on May 3 for the first time since October 2010 as budget data improved and on optimism that Greece is meeting the terms of its rescue packages.
The European Commission forecast on May 3 that Greece will have a budget deficit of 3.8 percent of gross domestic product this year as the economy contracts 4.2 percent, its sixth year of recession. The commission also predicted Greece will next year have a 1.8 percent primary budget surplus, which excludes debt service payments, and GDP will rise 0.6 percent.
The number of public employees in Greece is falling and the country will exceed its bailout target of reducing the total by 150,000 by 2015, while state-asset sales are attracting interest from Chinese investors, Stournaras said.
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