Greek bonds rally as EU confirms 2016 primary surplus at 4.2% of GDP
Greek government bonds rallied sharply after Brussels confirmed that Athens soundly beat its public deficit targets for 2016.
The European Union's executive arm confirmed on Monday that Greece's primary surplus, the excess of revenues over spending without taking into account interest payments on the country's debt, hit the equivalent of 4.2% of Greece's gross domestic product.
That was well ahead of the 0.5% of GDP goal which Brussels had set and sent the yield on the country's benchmark two-year sovereign debt spiralling lower by 60 basis points to 6.58%.
Yields on bonds move inversely to their prices.
In parallel, the yield on its 10-year debt was 20 basis points lower at 6.43%, although analysts tend to focus more on the two-year note given that it is much more actively traded.
In any case, the International Monetary Fund, which is wary of forcing Athens into excessively harsh reforms, believes the 2016 surplus was only reached thanks to 'one-offs' and is not sustainable in the long-run.
For that reason, until recently the Washinton-based lender has left the door open to not participating further in a financial bailout for the country.
Brussels on the other hand is adamant that it can be sustained.
The news comes just as a technical team from the European Union and the IMF has landed in Athens today to thrash out a deal to disburse the next installment of €6.0bn of financial aid before sovereign debt repayments falling due in July.