Ironically, even though Panitch is praising the left perspective, he basically argues that Greece is now back in the bond market because neoliberal reforms have made investors so happy.
Yanis Varoufakis breaks it down more realistically. Here he is in an RT interview, Euro Politics behind Greek Bond Sale w/Yanis Varoufakis & Fed Policy w/Tim Duy 04/15/2014:
Varoufakis also talks about it in Greece’s Grand Decoupling, the Nuclear Option and an Alternative Strategy: A comment on Münchau 04/14/2014 (all emphases in original):
There is, indeed, a simple reason that international investors are piling in to buy some of the nation’s paper assets (e.g. the freshly minted government bonds and shares in some banks), even though the country is economically kaput and its government is steeped in long-term insolvency more than ever. What’s this simple reason? The short-term decoupling of the value of paper assets from Greece’s real economy.Tags: austerity economics, eu, euro, european union, greece
Take for instance the new bonds, worth €3 billion, issued last week. This new debt has been added to the existing stockpile of €320 billion for a shrinking economy with a nominal GDP, currently, around €180 billion. To service it next year alone (in 2015), the government must achieve a gargantuan primary surplus of 12.5% of GDP and use it all to redeem debt (while Greeks are in the clasps of untold misery and only 10% of the 1.3 million unemployed receive any benefits). Why would a self-interested investor buy these new bonds, in view of the unsustainability of the country’s overall debt? The answer is, of course, that Berlin and Frankfurt have signalled to investors that there is nothing to worry about. That, while Greece’s debt will be, eventually, haircut with the same probability that the sun will rise against from the East tomorrow, these particular bonds will not be touched. Indeed, they have been led to believe that the ECB (via OMT or some other pretext), perhaps with the participation of the ESM, will stand behind these bonds. Similarly with banks like Alpha and Pireus that are immersed in non-performing loans: the Governor of the Bank of Greece has clearly stated that stress and quality assurance tests should "not be too strict lest they deter investors". Statements of this sort (by the, by the bye, former VP of Pireus Bank who moved straight to the office of Central Bank Governor) give heart to investors that new shares issued by these banks will be supported by active ‘gaze aversion’ on the part of the regulators; by a committed attempt not to look too seriously into the banks’ asset books.