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The external debt of Greece reached 187% of GDP

05 October 2010 / 08:10:03  GRReporter
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The external debt of Greece reached € 434.3 billion in the second quarter of 2010 according to data from the National Bank of Greece, published in Naftemporiki. The increase is € 21.3 billion compared with the first quarter but in relative terms this amount is 187 percent of GDP. The external debt of the Mediterranean country refers to the obligations of the public and private sectors to foreign creditors. It is noted in the report of the National Bank of Greece that the public sector formed most of the debt. Its volume reached € 184 billion up to June 30, 2010 compared with the first quarter when the value of the public liabilities to foreign investors was € 213.1 billion.

Experts from the National Bank of Greece reported that the reasons for the difference between the two quarters are the withdrawal of the country from the international markets and the low demand for Greek state bonds. Nevertheless, the drop does not affect the value of the total debt registered by the national audit office. According to the published report, a significant decrease in the value of bonds held by foreign investors was registered in the second quarter of this year. Their value reached about € 200 billion at the end of March 2010, while in the second quarter it fell to € 154.7 billion. This low price of the bonds refers to the price that should be paid if the maturity of the bonds sold at secondary market prices should be now.

Liabilities of banks increased by € 27 billion in the second quarter of this year, from € 112.6 billion at the end of March they reached € 139.6 billion at the end of June. One reason for the increase in foreign borrowing of Greek banks is that the European Central Bank was obliged in the spring to accept Greek bonds to ensure (albeit reduced) their liquidity at a time when the financial institutions in the country could not enter the international markets. According to the report of the National Bank of Greece, the short-term bank liabilities to foreign investors were € 105.3 billion in June this year and the long-term liabilities were € 34.3 billion. The loans of commercial banks have influenced the external credit of the National Bank of Greece, which has reached € 84.7 billion in June from € 60.9 billion at the end of March, 2010.

Tags: EconomyMarketsExternal debtGreece
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