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DAVOS-Greek finmin: next bond must be carefully timed

Published 01/29/2010, 09:11 AM
Updated 01/29/2010, 09:15 AM

DAVOS, Switzerland, Jan 29 (Reuters) - Greece's finance minister said on Friday it would be disastrous if his country had to finance all its maturing debt this year at current rates.

Asked how long Athens could go on paying the kind of premium it paid to sell 8 billion euros in 5-year bonds this week, George Papaconstantinou told Reuters: "Well, hopefully we won't have to go on very long doing it.

"It's true that if we service the whole 54 billion (euros) on those terms, it will be pretty disastrous for our ability to do other things," he said in an interview at the World Economic Forum in Davos.

However, the minister said there ws no immediate need for further funds and he expected debt spreads over benchmark German bonds to narrow once markets saw the government's deficit-cutting programme being implemented.

"Everybody knows what is the profile of our maturities. Everybody konws that it's the second quarter of this year that is difficult quarter for us. We have 20 billion coming in April-May," he said.

"We'll time our next issue to make sure we have good market conditions or at least an acceptable compromise given our financing needs and the conditions in the market," Papaconstantinou added.

Talk of a possible bailout for Greece by European Union partners was "absolutely not helpful" because it stoked market nervousness, and Greece would not participate in any such talk, he said. (reporting by Paul Taylor, editing by Krista Hughes)

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