The EU and IMF demanded the buyback, with the country paying an average of about 33.8 percent of face value to retire 31.9 billion euros of bonds and reduce its debt, which the European Commission expects to peak at 174 percent of gross domestic product next year. In March, private investors lost 53.5 percent of the face value of their bond holdings, reducing the country’s debt by about 100 billion euros in the largest sovereign restructuring in history.
Greece’s economy, which has been in recession for five years, probably will contract 6 percent this year and 4.2 percent in 2013, according to the European Commission. About 25 percent of the workforce is unemployed with youth joblessness at 56 percent, the highest in the EU.
Tax Regime
“What’s happening in Greece at the moment is not a recession, it’s a Great Depression,” said Tassos Anastasatos, senior economist at Eurobank Ergasias SA in Athens. The country needs to stimulate exports, while a lack of stability in the country’s tax regime is impeding foreign investment, he said.
The Athens Stock Exchange Index made its first annual gain since 2009, climbing almost 30 percent this year. Coca Cola Hellenic Bottling Co. SA, the country’s biggest company by market value, said in October that it would leave the exchange to list its shares in London because of concerns about the unstable tax environment.