The result of the May 21 elections was accompanied by economic euphoria, the key features of which were successes in Stock Exchange and its reduction The cost of Greek loans. We would do well to show some restraint.

And that’s because Greece hasn’t been improving its economic data day by day. It simply reduced the risk of future political instability. Let’s see their reaction investors. Hedge funds have been betting against Greek bonds (i.e. going short). The amount of bets reached 500 million dollars.

What is their logic? If the results of the first election did not match the results of the polls, then hedge funds would profit by buying back shares. Greek bonds at a lower price. Of course, their short policy “failed”. The good thing about all this is that the $500 million rate was only 0.115% of Greece’s total debt.

Thus, the rate of 0.115% was very small and could not (on its own) drastically affect the cost of borrowing our country! What we have to “save” from the energy of the funds is that (international) investors can change their mood from one moment to the next. Consequently, a significant decline in the cost of Greek loans should also not be taken for granted in the coming months.

There are three reasons for this. OUR first reason; The easier it is for investors to buy Greek bonds, the easier it is for them to sell them. OUR The second reason this is due to the results of the second elections and the willingness of the next government to implement reforms.

I remind you that from 2012 (that is, when credit rating agencies downgraded Greece’s rating to selective default status) until today, according to the World Bank, Greece has managed to improve its rating in government performance indicators at a “snail’s pace” by only 11 positions out of 214 states (i.e. from the 80th to the 69th).

Logically, the credit rating agencies will wait for the policy statements of the new government, and especially what it is going to do in terms of government performance, before we assign an investment rating.

OUR third reason this is because Greece remains particularly vulnerable to possible negative international developments. So, if an agreement is not reached in the coming days to increase the debt limit in the United States, they are in danger of default. Something that will negatively affect everyone, and even more so those who remain outside the investment grade, such as Greece …

* Mr Costas Milas is Professor of Finance at the University of Liverpool.