Hedge funds, who may have acquired Greek debt in the secondary markets at deep discounts of 50% plus, push for reimbursement in full.
Source: NY Times
...According to one senior Greek government official involved in the negotiations, Greece will present an offer to creditors this week that includes an interest rate or coupon on new bonds received in exchange for the old bonds that is less than the 4 percent private creditors have been pushing for — and they will be forced to accept it whether they like it or not. ...
The surprise collapse last week of the talks in Athens raised the prospect that Greece might not receive a crucial 30 billion euro bailout installment and might miss a make-or-break 14.5 billion euro bond payment on March 20 — throwing the country into formal default and jeopardizing its membership in the euro zone.
Talks between the two sides, borrower and creditors, picked back up on Wednesday evening in Athens when Charles Dallara of the Institute of International Finance, who represents private sector bondholders, met with Prime Minister Lucas Papademos of Greece and his deputies.
While both sides have tried to adopt a conciliatory tone, the threat of a disorderly default and the spread of contagion to other vulnerable countries like Portugal remains pronounced.
Source: NY Times
According to Germany’s proposal, whatever the result of the PSI deal, Greece will need to “legally commit itself to giving absolute priority to future debt service” and “accept shifting budgetary sovereignty to the European level”. If the Greek government is not willing to do this, the troika would presumably turn off the taps of bailout money and Greece would default.
ResponderEliminar