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Athens still able to borrow despite political uncertainty


Athens still able to borrow despite political uncertainty


Uncertainty over Greece’s political future had only a limited effect on Athen’s ability to borrow money.

The amount of interest it had to offer on its six-month government bonds rose just slightly, to 4.69 percent from 4.55 percent in April.

The bond auction saw only a slight fall in investor interest and raised 1.3 billion euros.

However political scientist Savas Robolis at Panteion University said investors have reason to be nervous: “The politicians can’t say no (to the bailout) as that would threaten their debt restructuring and there’d be a chance that in the near future – by the end of 2013 or the middle of 2013 – that Greece would have to leave the eurozone. Our research shows that would lead to a plunge in Greek living standards of at least 80 percent.”

Nearly 22 percent of Greek workers are without a job and there is little chance of that changing as the IMF has forecast the economy will shrink by 4.7 percent this year.

The country is hugely dependent on EU and IMF aid, but that is conditional on tough austerity measures being enacted by the government, which makes the political stalemate really bad news.

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