By Vassilis Kostoulas
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The Greek state's continued absence from international money markets is having negative effects on liquidity in the thrice bailed-out Eurozone member-state and on economic confidence, with the yield on the 10-year bond again hovering at the 4.5-percent mark.

According to banking and business sources in the Greek capital at the beginning of the year, this situation will cause "hiccups" in the "real economy" if continued.

Nevertheless, the current Tsipras coalition government - now months before a regular general election must be held - continues to maintain that it can rely on a 24-billion-euro "cash buffer" accumulated since 2017 from unused third bailout loan money. If fact, finance ministry officials maintain that the sum is enough to cover the Greek state's borrowing needs for the next four to five years, and thus the country does not need to foray into the markets.

European partners and creditors have also taken a decidedly conservative position vis-a-vis the Greek state's aggressive return to sovereign borrowing markets, advising instead patience and appearing content in framing Greece's exit from a third consecutive bailout program - concluded last August - as a major success.

Credit rating firms, such as Moody's, have also mostly focused on Greece's ability, in the short term, to service its external debt, with the effects from an extended absence from the markets still an unknown "variable" on the real economy's course.  

 A negative "trickle down" effect, however, is what now worries domestic analysts, given that if the state can't borrow, then banks can't borrow, which, in turn, significantly narrows the margins for extending credit to households and businesses in the country.

According to bank sources that spoke with "N", an extended absence by the Greek state from money markets will affect systemic banks' attempts to re-establish viable access to capital in order to boost their liquidity - especially from new bond issues. As expected, still high spreads on Greek bonds also negatively affect banks' borrowing.

The same sources said a such continued absence, especially if combined with uncertainty over Greece's growth prospects, will eventually lead to a slump in market sentiment and a dampening of whatever foreign direct investment prospects, as well as confidence by domestic businesses.