l****z
发帖数: 29846 | 1 A purely voluntary restructuring may not be possible.
Greek Prime Minister Lucas Papademos told a group of labor-union leaders
Wednesday that he expected that a deal on a 50% haircut on Greek government
bonds would be sealed within two weeks. A day earlier, a government
spokesman had warned that without a deal, Greece would be forced out of the
euro and into a hard default. The trouble for Athens is that the prime
minister's statement looks increasingly doubtful, and avoiding default may
no longer be possible.
Of Greece's €350 billion or so in debt, only about €206 billion
is still held by investors. The rest is owed to the EU, the IMF, or held by
the ECB through its emergency bond-purchasing program. It is only that first
€206 billion that is being threatened with haircuts and restructuring
, which is why Athens needs a 50% reduction in the value of that debt to
reduce the total it owes by €103 billion. The IMF, in turn, has
estimated that this would leave Greece with a sustainable debt burden of
only 120% of GDP. That assumes fairly optimistic things about future
economic growth, tax collection and so on.
Most of Greece's big creditors agreed in principle to a 50% reduction in the
value of what they're owed back in October. That was after an earlier
agreement on a 21% reduction was revealed to be woefully inadequate.
But one of the problems facing this deal is that the world's big banks only
own about 60% of that debt. The rest is in the hands of hedge funds and
other distressed-debt investors, not all of whom are necessarily inclined to
play along. Some own credit-default swaps on Greek debt, meaning they may
actually have an incentive to force a default, so that their CDS, a form of
insurance against default, will pay them in full for the value of their
holdings. Others may hold debt maturing over the next few months, and so may
figure that if they hold out just a bit longer, they could get paid in full
. There's about €36 billion in Greek debt maturing this year.
An agreement could be reached without the participation of some holdouts.
But that would have two effects. First, if even a single holdout is handed
an involuntary haircut, that would constitute a default, something the EU
has been at pains to avoid. Second, in order to reach the target of €
100 billion in debt reduction, everyone else would have to take even deeper
haircuts, something that the creditors' committee has made clear it does not
want.
We may get a deal with the biggest creditors in the next couple of weeks,
but that may not be enough to prevent at least a partial default. Being
declared in default would not necessarily be the worst thing that could
happen to Greece. Being unprepared for it, or telling everyone in advance
that default is tantamount to the end of the world, will only make it worse. |
|
