Posted on 03/07/2012 3:17:01 PM PST by bruinbirdman
Less than half of Greece’s international creditors had agreed to a vital €206bn (£172bn) bond swap on Wednesday night, leaving Athens dangerously exposed to default.
The Royal Bank of Scotland, Barclays and HSBC joined 30 European banks and institutions in declaring their acceptance of the deal - but the tally was still far short of the 95pc needed to avoid being officially declared in default.
The International Institute of Finance (IIF), the body that has negotiated with the Greek government on behalf of bondholders, put out several announcements on Wednesday, counting the proportion of the vote as it inched up. The latest statement said bondholders “amounting in aggregate to €84bn, or 40.8pc of the €206bn total eligible debt” would support the deal.
The regular updates coincided with provocative comments from Germany’s finance minister, Wolfgang Schaeuble, who said he had discussed with Greece’s finance minister Evangelos Venizelos whether it would be better for the country to leave the euro.
Speaking at the European University Institute in Italy, Mr Schaeuble said he had discussed the issue “very openly” with Mr Venizelos.
“Maybe you could say it was the wrong decision for Greece to join the common European currency,” Mr Schaeuble said. “Greece has failed for a long time to deliver what is needed to be in a common currency.”
Creditors have until 8pm GMT on Thursday to agree to a €206bn bond restructuring - the biggest ever attempted. A total of 95pc of bondholders must accept the deal - agreeing to take losses of about 75pc - for it to count as “voluntary”.
Analysts said the hurdle is too high and Greece will have to resort to so-called Collective Action Clauses (CACs) to push though the deal. Athens has said it will activate the CACs, which will impose the deal on all
(Excerpt) Read more at telegraph.co.uk ...
If 95% of the bond holders agree to a 75% loss, that’s a default. Period.
I’d laugh but the US will be in the same situation soon enough.
Greece? Default?? My God! This is so unexpected!!!!
Oh, I don't know about that.
That's only true if the currency in question is an infinitely malleable one of dubious utility. It's only an issue if the currency is subject to the political compromises of a couple dozen parliaments. And it only matters if those parliaments routinely lie to each other regarding the rules of being in the currency.
Greece was seeking the well-understood objectives of the Euro: milking the Germans for all they're worth. Greece just got caught out first and exposed the scam. That's its sin.
I think they are just stalling until they figure out how to stick the West's taxpayers with the bill. Let Greece default now. The longer they delay, the bigger it will be.
The ISDA determines and defines when a default occurs. This is the same organization that is made up of board members that also work for US major banks. The same banks that sold 95% of all outstanding credit default swaps (CDS). These CDS insured against country’s bonds failing, such as Greece.
If a default occurs, the big banks have to pay off on the insurance contracts and go broke in the process because they don’t have the money. So, ISDA will never declare a default unless they have a way of getting banks out from underneath their obligations.
Greece already defaulted recently, ISDA deemed it a nonevent.
Government Motors has already defaulted by shafting their bond holders. With help of the socialist in White House and his union comrades, GM bondholders equity was reduced to zero. That is both immoral and illegal since bond holders are first in line towards company assets. With that debt wiped out, Government Motors is doing just fine, thank you Mr. President.
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