Greek debt auction averts imminent default

Athens’ successful bond auction cheered traders, despite warnings that Greece may have to hold another emergency auction to raise the final €1bn needed to redeem the €5bn bond due on Friday. Greece’s finance minister, Yannis Stournaras, admitted there was still a “very high” risk of default, even if Athens meets its obligations this week.

Speaking to the EU Economic & Monetary Affairs Committee, Mr Stournaras said fears over Greece - or “drachmaphobia” as he called it - would only be relieved once the €31.5bn next tranche of aid had been released.

The decision was delayed for another day as European leaders fended off criticism from the International Monetary Fund (IMF) over their decision to relax Greece’s austerity deadlines by two years. The delay, which is expected to cost creditors an extra €32.6bn, was described as a third Greek bail-out. The IMF, argued Greece should stick to the original debt reduction target of 120pc of GDP by 2020, not 2022. Nicholas Spiro said: “Athens’ creditors’ ability to kick the Greek can further down the road knows no bounds.”

Eurozone financial stocks were pushed up on hopes that Spain was close to conceding it needs a full bail-out.

http://www.telegraph.co.uk/finance/financialcrisis/9676055/Debt-crisis-Greek-debt-auction-averts-imminent-default.html