Sunday, July 15, 2018

Bloomberg's Model Shows Dramatic Decline In Greek Interest Expense

The source of the below graph is Bloomberg, as presented in this article. The graph shows annual debt payments broken down into bond maturities, loan maturities and interest on both. What stands out is the interest payments shown in this graph. It's a bit hard to tell from the width of the bars how much the underlying interest is in Euros but a full column represents 5 BEUR. And there is at best one column (2019) where the interest bar spreads over half a column, i. e. interest in the area of 2,5-3 BEUR.

In recent years, Greece has spent on average about 5,5 BEUR on annual interest. The Bloomberg graph would suggest a dramatic decline in interest, much more so than I read in the recent debt relief agreement. So either Bloomberg's numbers are wrong and/or they know something which the world hasn't been told yet. If someone from Bloomberg reads this, a clarification would be welcome.


  1. Pardon my lack of german, but if the yellow is the interest, then most of the time Greece pays 0 EUR in interest, based on that column. So here's the question: What kind of loan did Greece get with no interest? Because from 2019 to 2060, i only see 14 years with yellow band. So for 27 years Greece pays 0 interest!? When did that happen? And how? Makes you wonder why the requirement of primary budget surplus of 2.2% for 41 years...

    1. I have the same questions as you do. BTW, interest is the red column on the far right. So can see the graph better when you open the link in the first line of the article.

  2. Some sources

    1) PDMA

    read "Maturity Profile Central Government Debt Table_31-03-2018.pdf"

    2) In relation to this

    you can write in "Individual Repayments", a year, eg 2019 and see the amounts.

    If you compare WSJ and PDMA, (what in Bloomberg isn't visible for 2019), are ECB's ANFA 996.4- and SMP 4.768,6 with almost the same amounts in WSJ and in PDMA sites.

    About ANFA & SMP the ESM statement of 22 June:

    "The use of 2014 SMP profits from the ESM segregated account and the restoration of the transfer of ANFA and SMP income equivalent amounts to Greece (as of budget year 2017). The available income equivalent amounts will be transferred to Greece in equal amounts on a semi-annual basis in December and June, starting in 2018 until June 2022, via the ESM segregated account and will be used to reduce gross financing needs or to finance other agreed investments."

    In PDMA there are also 1.011 TBILLS and 2.960 BONDS and some small sums, which all are a little over 4 bn.

    This is what in WSJ is stated as "Private investors" and "Bonds issued by Greece (2014 and later)"?

    3) pdma assessment

    The REPO are 22,5 bn in 2018 quite high short term borrowing.

    1. Very interesting links. Thank you! ANFA/SMP explain the near term; I had overlooked that. But the interest expense goes down later on and then disappears entirely, for which I have no explanation. What I find most interesting about the WSJ table is the high cost of some of Greece's debt. And Greece could borrow at near-zero rates from the ESM...

  3. I've seen some similar graphs on Bloomberg or quoting Bloomberg since '17 without further explanation.
    I think it's simply an (grave) error that has never been corrected.
    Judging by comparison to other charts I've seen one, I guess last year someone at Bloomberg misnamed, replaced somewhere "Bonds owed to Private Investors" and/or "(Bilateral) Eurozone Government loans" with "Interest (payment)" and this has hence stuck and been copied without verification.