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Greek Bailout Exit Plan at Risk

Greece’s plan to escape the shackles of the biggest bailout in history is at risk of falling apart.  A monthlong market selloff in stocks and bonds has pushed yields to a level that investors say threatens once again to cut Greece off from markets.

“The selloff in Greek bonds is signaling that Greece has lost market access,” Thanassis Drogossis, head of equities at Athens-based Pantelakis Securities SA, said in a telephone interview. “Investors fear that an early exit from the bailout programs may prove that fiscal improvement so far is unsustainable.”

A rally in Greek government bonds earlier this year emboldened Prime Minister Antonis Samaras, who announced plans to sever the 240 billion-euro ($307 billion) lifeline that has kept the country afloat since 2010. The bailout loans came with strict conditions on belt tightening that exacerbated Greece’s worst recession on record and triggered a political backlash. Samaras’s plans may yet be derailed by the selloff.

Bloomberg [1]

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