Greece optimistic ahead bond swap deadline

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VietnamNet English - 72 month(s) ago 7 readings

Greek officials expressed optimism on Thursday over the result of the voluntary debt restructuring plan under way as part of efforts to avoid a chaotic Greek default, ahead of a looming deadline around 2000 GMT.

The results are expected to be officially announced on Friday early morning at approximately 0600 GMT, according to local media reports, citing government sources.

"If everything goes well, on Friday we will be able to announce that the debt load on the shoulders of Greek people, the Greek nation, and future generations will ease by over 105 billion euros (139.01 billion U.S. dollars), which represents 50 percent of the GDP," Greek Finance Minister Evangelos Venizelos stressed, addressing the parliament on Thursday noon.

Meanwhile, Greek media reported that according to sources, officials expect that after a slow start, the participation rate of private sector bondholders by Thursday night to the terms for the writedown of part of the Greek sovereign debt, will eventually surpass the 75 percent threshold.

In such case the swap deal reached in February, known as Private Sector Involvement (PSI) scheme, can become binding even for investors not willing to accept losses, since Athens will be able to activate collective action clauses.

Under the PSI plan clinched after marathon negotiations with the Institute of International Finance, private creditors will accept losses of some 53.5 percent on the value of Greek state bonds they own in return of new ones with longer maturities and interest rates.

A successful result regarding the "haircut" process on the Greek bonds is expected to unlock a vital second 130-billion euro (171.6 billion dollars) bailout loans package to Greece by European Union and International Monetary Fund in time to avoid a financial collapse that could destabilize the European common currency zone and the international financial system.

Greece depends on multi-billion euro aid by international creditors since 2010 to cover its financing needs in return of a painful austerity and reform program. On March 20 a 14.5 billion euros (19.14 billion dollars) bond repayment is due.

Ordinary Greeks on Syntagma square in front of the parliament building on Thursday did not seem to share the anxiety of officials and bankers over the deadlines, voicing pessimism for the day after the PSI plan and the demands attached to the new bailout deal.

"Honestly, I do not share the opinion of politicians. I am very pessimistic," Dimitra Kapsocha, a young Journalism student told Xinhua.

Financiallly supported by her parents, a pensioner and a civil servant, who have suffered waves of cutbacks on their income over the past two years due to measures implemented to slash deficits, she struggles to make ends meet every day.

"Now, I have to think about everything, every little daily cost, even the sum for the metro ticket," she explained, forecasting that the worse is still to come for the average Greek household, with or without a bankruptcy, since pressure from creditors continues.

"We don't expect anything big from this "haircut". Greek workers have turned bold from the "haircuts" on salaries. I don't believe this plan serves the interests of ordinary people," civil engineer Efthimios Kiamos added.

"People must rise up and overturn these policies. There is no other solution," he told Xinhua, voicing exasperation about the heavy recession the country witnesses for a fifth consecutive year.


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