HALISTER1: Greek Bond Spreads to Widen if German FDP in Coalition: ING

Greek Bond Spreads to Widen if German FDP in Coalition: ING

(Bloomberg) -- Greek bond spreads over Germany could widen and become more volatile if Angela Merkel’s CDU forms a coalition with pro-business FDP in elections Sept. 24, as the latter have indicated a hard-line stance on debt relief for Greece, according to ING.
  • “The tone could be a bit harsher toward Greece and bond spreads therefore a bit wider,” says strategist Benjamin Schroeder in emailed comments
    • “GGB spreads over bunds could get more volatile”
  • “If the FDP were to become coalition partner it would probably be even more complicated to get any form of debt relief measures for Greece passed”
  • Any coalition with SDP or Greens could vote in favor of Greece, he says
  • NOTE: Trading in Greek bonds remains scant. Bank of Greece data show that turnover on the electronic secondary securities market, or HDAT, totaled 15 million euros ($18 million) this month through Sept. 15, compared with 64 million euros in August.
To contact the reporter on this story: John Ainger in London at jainger@bloomberg.net To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net Anil Varma

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Angela Merkel (Federal Republic of Germany)
Benjamin Schroeder (ING Groep NV)

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