Deadline set for private holders of Greece’s debt
A DEADLINE of 8 March – next Thursday – has been set for private holders of Greek debt to participate in the proposed bond swap, required to significantly cut the struggling state’s debt burden.
The debt swap is a crucial part of Greece’s latest bailout, which is expected to see the Mediterranean country receive a €130bn (£110bn) rescue package in time to avoid defaulting on repayments due on 20 March.
The target came as the Institute of International Finance (IIF), the body representing private debt holders, urged governments to grant extra funds to the IMF, and for austerity measures to be slowed.
“The IMF has a clear responsibility to not only advocate key economic reforms, but to help restore market confidence and foster a stable environment in private capital markets,” the IIF said in a statement.
The group also called for more debt-sharing across the Eurozone, in an effort to relieve the burden on ailing peripheral governments.
“The Fiscal Compact needs to provide for risk-sharing — moving towards more mutualisation of the fiscal burden will help weaker Euro Area members with much-needed adjustment and structural reform,” it said.
Yet the sentiment is unlikely to be shared in Germany, where calls for even higher contributions to the bailout programme face resistance.
Yesterday German finance minister Wolfgang Schaueble said that boosting bailout funds risked eroding incentives for reforms in indebted states.
And a fellow member of his government broke ranks by calling for Greece to leave the euro.
“Greece’s chances to regenerate itself and become more competitive are certainly greater outside the currency union than they are if it stays in the Eurozone,” said Hans-Peter Friedrich, a leader of the conservative Christian Social Union (CSU).
Friedrich told the magazine Der Spiegel that he endorsed “creating incentives” to prompt Greece into exiting the single currency.
Political strife continued in Greece throughout the weekend, with a breaking scandal over an unnamed MP who allegedly sent €1m abroad in the troubled run up to the latest bailout agreement.
Finance minister Evangelos Venizelos has said that authorities will examine large transfers of money out of Greece made in the last few weeks.