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Fri Mar 9, 2012, 05:24 AM

Greece averts immediate default with bond success

Source: Reuters

By George Georgiopoulos and Lefteris Papadimas

ATHENS | Fri Mar 9, 2012 10:03am GMT (Reuters) - Greece averted the immediate risk of an uncontrolled default, winning strong acceptance from its private creditors for a bond swap deal which will ease its massive public debt and clear the way for a new international bailout.

The finance ministry said creditors had tendered 85.8 percent of the 177 billion euros in bonds regulated under Greek law. This would reach 95.7 percent of all privately-held Greek debt with the use of "collective action clauses" to enforce the deal on creditors who refused to take part voluntarily.

The result should clear the way for the European Union and International Monetary Fund to release a 130 billion euro ($172 billion) bailout package agreed with Greece last month.

Government spokesman Pantelis Kapsis said the result was a "vote of confidence" in Athens' ability to carry out deep structural reforms to its stricken economy. "I think it's a historic moment," he told private television station Antenna.

Read more: http://uk.reuters.com/article/2012/03/09/uk-greece-idUKBRE8270FF20120309

14 replies, 2287 views

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Arrow 14 replies Author Time Post
Reply Greece averts immediate default with bond success (Original post)
Ghost Dog Mar 2012 OP
Demeter Mar 2012 #1
Ghost Dog Mar 2012 #9
AnneD Mar 2012 #11
Ghost Dog Mar 2012 #13
Yo_Mama Mar 2012 #2
Owlet Mar 2012 #3
CAPHAVOC Mar 2012 #6
Yo_Mama Mar 2012 #8
xchrom Mar 2012 #4
bluecoat_fan Mar 2012 #5
dipsydoodle Mar 2012 #7
grahamhgreen Mar 2012 #10
Ghost Dog Mar 2012 #12
dipsydoodle Mar 2012 #14

Response to Ghost Dog (Original post)

Fri Mar 9, 2012, 05:32 AM

1. The Fix is In

Temporarily.

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Response to Demeter (Reply #1)

Fri Mar 9, 2012, 09:20 AM

9. Well, it says here: "Greece averts immediate default, markets sceptical"

Last edited Fri Mar 9, 2012, 11:34 AM - Edit history (1)

By George Georgiopoulos and Lefteris Papadimas

ATHENS | Fri Mar 9, 2012 2:03pm GMT (Reuters) - Greece averted the immediate threat of an uncontrolled default on Friday, winning strong acceptance from its private creditors for a bond swap deal which will eat into its mountainous public debt and clear the way for a new bailout.

Euro zone ministers held a teleconference call and were expected to declare Greece had met the tough terms of the 130 billion euro ($172 billion) rescue, and approve the release of funds which Athens needs to meet heavy debt repayments later this month.

But markets sharply marked down the value of new Greek bonds to be issued to the creditors, reflecting the risk of paralysis after elections expected this spring and doubts about whether Athens can bring its debt to a more manageable level by 2020.

On the streets of Athens, some Greeks denounced the deal as a sham that would impose more crippling austerity on a people already enduring pay and pension cuts and soaring unemployment.

/... http://uk.reuters.com/article/2012/03/09/uk-greece-idUKBRE8270FF20120309

Edit to add (from Reuters UK front page):



(Here on my travels through the heart(s) of UK, btw, I'm picking up a sense of increasingly nervous complacency... Will post more shortly...)

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Response to Ghost Dog (Reply #9)

Fri Mar 9, 2012, 11:59 AM

11. Can't wait...

for your on the ground report. I have been reading blogs so I have a sense of it but will love to hear from you.

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Response to AnneD (Reply #11)

Fri Mar 9, 2012, 12:27 PM

13. I'm working on it, AnneD.

Last edited Fri Mar 9, 2012, 01:18 PM - Edit history (2)

I slept last night in a pub, no, I should say Mediterranean-style gastropub (and got pìssed on fine wine and Armagnac) not far from one of your (US) military airbases. ¿Some nice guys, right? I asked.

No idea, the locals said. They (almost) never leave their base.

Well, at least they bring money in, and they're providing us with some security, I remarked. ¿Or are they rendering us ever more vulnerable? Was the response.


Hummmm.


Edit: ¡Greetings from Airstrip One!


National flags flying all over the place, here. That's new. I recall my father commenting, back in the 'sixties, home from his many business trips to Toronto, Canada: The Canadians fly their flags, everywhere, because basically they feel insecure. We English don't need to fly any flag, here at home.

Oh, it's the Queen's Jubilee year, they tell me. Weird. I seem to remember there was one of those ... uh, a long time ago. What about the six guys just died in Afganistan, I gently, respectfully, enquire.

Big shrug. ¿So what? They indifferently say. More roadkill than that right here every day. The General on the radio, however, declaims: precisely because these young kids lost their lives, we must continue to continue to go on...

Fighting.

Is it just me? The rising anger, amongst those who pay attention, and not on TV precisely?

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Response to Ghost Dog (Original post)

Fri Mar 9, 2012, 06:23 AM

2. They used the CAC, so they defaulted

They had to use the CAC because the Troika wants a high participation rate as the condition of the next 130 billion.

So they are in default now.

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Response to Yo_Mama (Reply #2)

Fri Mar 9, 2012, 06:57 AM

3. Yup..that's right. And CDS should kick in..

..although with ISDA one never can be sure. We'll find out in a couple of hours.

I got a kick out of all the joyful statements from the financial wizards over there. They are all 'so relieved". They are just as good as kicking the can down the road as our 'leaders' here are. I give the Eurozone another eighteen months, and that's being generous.

"Athens confirmed it would enforce the deal, activating the collective action clauses (CACs) on the bonds regulated under Greek law. It will not be so easy to force holders of bonds governed by foreign laws to come to the table.

Using the CACs is likely to trigger payouts on the credit default swap (CDS) insurance that some investors held on the bonds, an event which would have unknown consequences for the market.

The International Swaps and Derivatives Association said it will meet on Friday at 1300 GMT to decide whether Greek credit default swaps will pay out.

"It almost now certainly going to trigger CDS. If this doesn't trigger it, nothing will," said Nick Stamenkovic, a bond strategist at RIA Capital markets in Edinburgh."

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Response to Owlet (Reply #3)

Fri Mar 9, 2012, 08:16 AM

6. A stay of execution

 

Is always sure to make the condemned happy.

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Response to Owlet (Reply #3)

Fri Mar 9, 2012, 09:00 AM

8. If the ISDA ruled that it wasn't a default

The CDS business would be over.

There aren't that many swaps out on Greek bonds any more. The market will survive it just fine. It's far below the Lehman level (as far as we know).

Also Greece extended the deadline for the bonds issued under non Greek law until the 23rd.

The biggest question is "Will the Germans have to pay up?" They clearly didn't want to. The Germans would rather Greece didn't qualify for this next payment at all.

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Response to Ghost Dog (Original post)

Fri Mar 9, 2012, 08:05 AM

4. Du rec. Nt

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Response to Ghost Dog (Original post)

Fri Mar 9, 2012, 08:13 AM

5. The aim is to cut debt from 160% of GDP to 120% by 2020

sounds like this will go on forever.

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Response to bluecoat_fan (Reply #5)

Fri Mar 9, 2012, 08:44 AM

7. Forever and a day.

but possibly just 6 months time before it all goes pear shaped.

I'm forever blowing bubbles.............

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Response to Ghost Dog (Original post)

Fri Mar 9, 2012, 11:05 AM

10. "Averts", for now, the vultures who caused the crisis will continue to extort money.

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Response to Ghost Dog (Original post)

Fri Mar 9, 2012, 12:14 PM

12. Grecia ha cumplido todas las condiciones para recibir el segundo rescate

BRUSELAS, 9 Mar. (EUROPA PRESS) - Los ministros de Economía de la eurozona han constatado este viernes, tras celebrar una reunión por teleconferencia de poco más de una hora, que Grecia ha cumplido todas las condiciones exigidas en materia de recortes presupuestarios y reformas para recibir el segundo rescate de 130.000 millones de euros que Atenas necesita para evitar la quiebra.

Por ello, el Eurogrupo ha lanzado el procedimiento de ratificación del nuevo plan de ayuda en los parlamentos nacionales, según ha informado su presidente, Jean-Claude Juncker, en un comunicado al término del encuentro.

"Celebro la evaluación detalla de la troika según la cual Grecia ha aplicado todas las acciones previas acordadas de forma satisfactoria", ha resaltado Juncker.

/... http://www.europapress.es/economia/noticia-grecia-cumplido-todas-condiciones-recibir-segundo-rescate-20120309142248.html

(Donde dicen "detalla" debe decir "detallada" )

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Response to Ghost Dog (Original post)

Fri Mar 9, 2012, 03:13 PM

14. latest news on subject

default does constitute a credit event in Greece so cdss will trigger.

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