Greek Debt Chief: EU Deal Talk Hurt More than Helped
The talk around the deal agreed by European Union leaders to support Greece in case it needs more liquidity hurt the euro zone member more than it helped it because it created more uncertainty in the market, Petros Christodoulou, director general of Greece's Public Debt Management Agency, told CNBC Tuesday.
After the country's 10-year bond issue in early March, which was heavily over-subscribed, spreads had started to tighten; but with all the talk about involving the International Monetary Fund and various discussions about support packages, they widened again, Christodoulou explained.
"Had there not been any talk of the IMF and support packages we would have been left alone in peace and been able to issue and have a proper and well functioning market," he said.
Speaking to CNBC, Christodoulou said the deal "made no impact whatsoever" on Monday's 7-year Greek Eurobond action.
Christodoulou admitted that the deal removed altogether any refinancing risk.
But "it is more like an out of money option. We never accounted on it, never intended to use it, still don't intend to use it, we wanted to go it alone and we still want to go it alone," he said.
Investors are wondering what it would take for the rescue package to be triggered.
Christodoulou said that there is a certain level of spread widening where financing will become unaffordable.
"We're not sure what point or what cost but at some point we can't just say 'I'll pay higher'. At some point the higher you pay the less you attractive it becomes," he said.