While the country’s financial and economic crisis is far from over, Greece is decisively heading in the right direction. The government is running a primary budget surplus (excluding debt servicing costs) and in April 2014, it was able to return to the capital markets for the first time since 2010, with a €3bn five-year bond that was more than six times oversubscribed, resulting in an eventual yield of less than 5%. Richard McGuire, senior fixed-income strategist at Rabobank, talks of a period of “bullish reflexiveness” in peripheral eurozone sovereign debt markets.
“There is self-generating momentum as spreads narrow, leading to ratings upgrades, and allowing bailed-out countries to dip their toes back into the market. That started with Ireland last year, then Portugal in early 2014, and now Greece,” he says.
