The Greeks have done it

Several weeks ago I gave the heads up that the Greek government announced its intentions to attempt to raise more money by the issuance of more debt.  This was a very closely scrutinized event.  If the Greeks failed then it would be a vote of no confidence from the international financial community.  If the Greeks were to succeed it would be a vote of confidence that the worst of Europe’s economic problems was behind it.

Today the first Greek debt auction in some time went well.  Greece was able to place all of the debt it intended to place, namely 1.625 billion euros.  The interest rate on the debt was only slightly higher than that paid in April.  This is an indication that the financial markets have calmed down considerably versus May when a full on meltdown occurred.  Mitigating against full on champagne corks being popped is that the debt raised by Greece has a maturity of 6 months.  So rigidly speaking, the financial markets have only voted that they don’t think Greece will default in the next 6 months.  Not a huge ringing endorsement.

The Greek government intends to raise more capital in the near future.  I will be watching those auctions closely, too.