Greece Denies US$35 Billion Bond Sale to China

30-Jan-2010  Athens denied reports that it planned to offer Beijing a US$35 billion government bond sale as a way to pay for its increasing public debt.

Greek’s Finance Ministry said in a statement:”The figures reported are not true.” An earlier report claimed that investment bank Goldman Sachs approached the State Administration of Foreign Exchange, the agency managing China’s US$2.4 trillion foreign exchange reserves, about a possible purchase although Beijing rejected the offer.

Greek Finance Minister George Papaconstantinou told the Financial Times in an earlier report that he would visit China on a road show in February although no target goal for a debt placement was set.

Athens will have more bonds up for sale next month in an attempt to plug its dire finances. According to European Union, the weak Greek economy could lead to a spiraling debt crisis that could affect other countries in the region.

Greece has debt worth 113 percent of its gross domestic product and its public spending deficit increased to 12.7 percent of output in 2009. The country now has the largest budget deficit in the European Union.

Athens was said to have rejected a suggestion that a Chinese bank could buy a majority its stake in National Bank of Greece, reports the Financial Times. It was also reported that Chinese officials said China Investment Corp. would not be interested in such a deal and that regulators would not approve Bank of China making such a risky decision.

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