Athens shakes the markets again. Greece may need more financial aid, although it will do everything to avoid it. This was stated by Prime Minister Lucas Papademos in an interview with Sole24ore. "Greece may not have access to markets even if all measures are fully implemented," said the prime minister. “It is difficult to predict market conditions and expectations in 2015. Some form of financial assistance may be needed, but we must work hard to prevent this from happening. The premier's words therefore confirm the concerns of Standard & Poor's which yesterday reiterated that Athens will probably need another restructuring plan.
But Papademos is satisfied and praises his country by listing the results obtained in the last two years: “The primary deficit has fallen by more than 8% of GDP; and thanks to an internal devaluation, Greece it has recovered 50% of the competitiveness it lost vis-à-vis the countries of the euro area in the previous nine years". Of course, adds the premier, “it is also true, however, that Greece has disappointed partners and markets”, especially for the delays recorded in the adoption of reforms.
Yet Papademos has no doubts that Greece will continue to use the euro because the consequences of an exit "would be devastating". According to the Greek premier "the return of the drachma would cause high inflation, exchange instability, and a real loss of value of bank deposits”, therefore the country will do everything to stay in the euro and "so that a third adjustment program is not needed". But much "will depend on the pace and effectiveness of the implementation of the current programme".
Yesterday the yield on the 10-year Greek government bond, used as a benchmark for calculating the spread with the German Bund, exceeded 20% again and this morning stood at 20,5%. While the 1-year bond has reached astronomical interest: 122%. It is therefore understandable why the head of state Papademos fears that the markets will not be the best solution for financing himself in the coming years.
