Greece’s Journey to Redemption Remains a Long One After Aid Deal Uncertain

Greece may have passed a milestone and its bond market has been lucrative for some investors, but the road to recovery doesn’t look much shorter.

The yield on Greek 10-year bonds fell below 7 percent — the threshold where countries were forced to seek aid during the European debt crisis — for the first time since November after creditors agreed to release 10.3 billion euros ($11.5 billion) and pledged to reduce the debt burden down the line. Greece has delivered the highest returns of all euro region sovereign debt tracked by Bloomberg’s World Bond Indexes this year.

The question is whether the nation and its economy can endure yet another squeeze. While the latest deal avoids another summer standoff over finances, austerity measures equal to 3 percent of gross domestic product will kick in from June, further dampening economic activity in a country where almost a quarter of the workforce is without a job.

Bloomberg

Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.