Car bomb hits Athens as Greece returns to global bond market

ATHENS -- A powerful car bomb jolted Athens on Thursday, causing damage but no injuries just as the Greek government prepared to raise money from global capital markets for the first time since the country was forced to accept an international bailout four years ago.

The early-morning explosion reverberated throughout the Greek capital and occurred across the street from the country’s central bank. Government spokesman Simos Kedikoglou condemned the attack, saying homegrown extremists wanted to spoil Greece’s much-vaunted return to international bond markets Thursday after years of brutal government cutbacks.

“The bond sale will proceed. We will not allow this significant event to be trumped by terrorism and its agenda of violence," Kedikoglou said.

Designed to raise about $3.4 billion, the bond sale represents a significant turnaround for Greece, Europe's least creditworthy nation, whose deficit crisis four-and-a-half years ago sparked a run of international bailouts for Eurozone countries and fanned fears of a breakup of the entire euro currency union.

Initial reports said the bond sale was more than eight times oversubscribed. Final figures, including the interest rate on the bonds, were expected by the end of Thursday.

The foray into the market and the car bombing in Athens came a day before a planned visit by German Chancellor Angela Merkel, whom many Greeks blame for pushing their country into austerity and depression. The Greek economy has lost about a quarter of its value since the Mediterranean nation's financial crisis erupted in 2009, and one in four workers is unemployed.

No group immediately claimed responsibility for the blast. About an hour before the booby-trapped car blew up, an unidentified caller contacted two local media outlets with forewarning of the explosion, police said.

Afterward, video images showed forensics experts and counter-terrorism authorities scouring the cordoned-off blast site for clues. Nearby storefronts were gutted, and shards of glass lay scattered on the street.

Local media reported that the car contained about 150 pounds of explosives.

The government's decision to once again raise money in the commercial market was hailed as a positive step, even if the amount in question is relatively low.

“The time is ripe, but the move is largely symbolic,” said Gikas Hardouvelis, chief analyst of the Athens-based Eurobank. “It’s all about sending out a strong signal, that Greece has turned the corner and that it remains well-anchored in the disciplinary device guiding the euro. For markets, which are a vicious force, that matters.”

Bankers and state officials said Greece had received about $23.6 billion in bids for the bonds through seven international credit institutions handling the sale. The officials suggested that the size of the sale could increase depending on demand for the issue, which is likely to pay investors about a 5% return.

But public anger remains high over the price that Greece has had to pay to right its finances, and Athens' debt burden continues to rise. Currently at 175% of gross domestic product, it could hit 190%, a report by Citigroup warned.

With local and European parliamentary elections nearing, opposition parties criticized the bond issue. The radical leftist Syriza party called it a campaign trick and accused Prime Minister Antonis Samaras of acting rashly.

“Going out to markets is one thing,” the Democratic Left party said in a statement. "Exiting the crisis is another." 


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