Greece is preparing to return to the bond markets but an early move could be costly, an analyst told CNBC on Thursday.
Media reports have suggested that Athens could be preparing a bond market comeback as early as next week. The country, which is under financial supervision until next year, needs to make a smooth transition back into the financial markets to show the current bailout program has been a success.
But the timing of its comeback is essential. "Going back to the markets early is a big mistake. Greece will have to pay a risk premium of several hundreds of basis points for medium term funding. All the private funding that Greece might find now will mature well before the European loans," Daniel Gros, director of the Centre for European Policy Studies, told CNBC.
Issuing new bonds is an important step for Greece to show its able to stand on its own feet. The last time Athens raised money in the bond market was in 2014. At the time, the government claimed that the sale marked the beginning of the end of tough austerity measures following a first bailout program in 2010. However, a few months down the line Greece asked for another bailout.