The European Bankers’ Final Plan On Greek Issue
European bankers have reached to the final draft of a solution to the Greek problem, ahead of the European Union Summit on Thursday, according to Greek daily Ethnos.
The newspaper reported that the project on the voluntary participation of private investors in the new support package is a proposal tabled by the head of the Institute of International Finance Charles Dallara. The plan is expected to be finalized during the week in order to reach to an agreement that would be formalized at the Summit.
The plan includes a menu of options and along with additional funding from the EU and the IMF would give breath to the sustainability of the debt. Ethnos reports that the IIF proposed three solutions, which could be activated also in combination:
-Extension of repayment for 30 years for all Greek bonds expiring until 2020 at par value with lower interest rate than current market prices.
-Swap of all Greek bonds with new 30-year bonds, which would have the same nominal value or would suffer a “haircut”. The process would be guaranteed by the EU.
-Repurchase of debt with cash from the secondary bond market, where the Greek bonds are traded at much lower than nominal value. It is proposed to create a fund with initial capital of €30-40 billion.
According to the same publication, besides the voluntary participation of private investors, which should not trigger a credit event, Greece should also be financed by the other Eurozone countries and the IMF with an amount of €60 billion .
(capital.gr)
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