Reuters flatters Greek economy

They say flattery will get you nowhere, but when it comes from international pundits and is directed to Greece, it is always welcomed. On the occasion of the Eurogroup meeting in Athens today, the international media organization is offering a flattering analysis of the country's economic situation.

In the piece, the writers mention all the positive aspects of the Greek program after last Sunday's multi-bill vote in parliament, presenting the hardships ahead and offering the most hopeful scenarios for the ultimate recovery.

Here's an excerpt of the piece by Martin Santa and Jan Strupczewski.

"Greece, fully funded for the next 12 months, hopes to finance itself on the market afterwards, but its euro zone peers say success depends on whether Athens delivers on the reforms it has promised so far.

Greece was cut off from markets in 2010 as the true scale of its debt burden became apparent. But after four years of painful measures to contain debt, two bailouts worth 240 billion euros ($330 billion) and a hit on private bondholders, the Greek economy is expected to return to modest growth this year.

Encouraged by falling bond yields, Greece is considering ending its four-year exclusion from bond markets by selling 1.5 billion-2 billion euros of five-year bonds in a test issue in the first half of the year.

The cash raised would complement money that Athens will get from the euro zone and the International Monetary Fund after a deal in March which unblocks the payment of overdue tranches.

The certainty that Greece will have enough money over the next 12 months to cover its expenses is important because it is a condition for the IMF to keep lending to Athens even after euro zone loans stop at the end of 2014.

If Athens succeeds in attracting investors to its bonds so soon after imposing heavy losses on them in 2012, it could be a game changer that boosts its chances of servicing its debts at more affordable levels.

That would support economic recovery, and give European policymakers a chance to assert that the much-criticized currency bloc can take care of its members and help them reform.

Greek 10-year yields have fallen to about 6.5 percent from more than 30 percent in the past two years, a striking improvement in the government's notional cost of borrowing.

The European Commission expects Greece to return to economic growth for the first time in 6 years, predicting gross domestic product (GDP) will grow 0.6 percent this year and 2.9 percent next year.

But with unemployment seen at 24 percent next year and public debt nearly triple the EU limit of 60 percent of GDP, Greece still has a long way to go."