Greece bets on five-year bond sale starting Monday

ATHENS, Jan. 25 (Xinhua) -- Greece put on auction on Monday five-year bonds at an estimated value of at least three billion euros in a critical test of its potential to borrow more from investors on international markets in a critical period for its economy.

In a challenging time for Athens, as foreign analysts express doubts whether the country will be able to tackle its enormous budget deficit in the future and meet its financing needs, the Greek Public Debt Management Agency opened the way for the sale.

While the spread between Greek and German 5-year bonds has widened over 380 points the past few days, Greece's government takes up a bold bet.

According to analysts in Athens this choice showcases the government's optimism that it can restore confidence in Greek economy soon.

They express caution though that the move could backfire if Greece will not be able to obtain more than three billion euros.

According to sources from the Finance Ministry the money raised within this week will finally exceed 5 billion euros. Representatives of Greek banks who are involved in the process express optimism too. Greece needs 53.3 billion euros to finance its needs this year.

In the meantime the country's state debt has ballooned over 300 billion euros, which is the official figure until Monday, according to the latest estimate by an independent committee set up last autumn at the newly elected government's initiative.

As Greece grapples over the last two months with an enormous budget deficit and a credibility deficit, as Athens recognizes, trying to convince other EU member states and international markets that it can tackle the crisis, local media refer to the panel's report.

The real value of state debt is much higher than 300 billion euros, since in this figure are not included 6 billion euros debts of hospitals to suppliers, loans to state enterprises guaranteed by the state, as well as obligations that stem from other contracts, the representatives of Bank of Greece, the Union of Greek Banks and think tanks concluded.

In any case the country will manage the burden as a member of the eurozone, Greek Finance Minister George Papaconstantinou repeated in one of his latest comments, stressing that Greece does not intend to leave the EU's monetary union zone, as a few commentators suggest. (1 euro=1.426 U.S. dollars)