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tommy271
Forumer storico
Greek Banks Ready to Take Part in Rollover, Finance Chief Venizelos Says
By Nicole Itano and Maria Petrakis - Jul 5, 2011 4:17 PM GMT+0200 Tue Jul 05 14:17:39 GMT 2011
Greek banks are willing to roll over their government bonds as part of a European Union rescue plan that will keep the country out of financial markets for three years, Finance Minister Evangelos Venizelos said.
“The Greek banks are ready to participate,” he said in an interview with Bloomberg Television in Athens today. “We must respect absolutely the voluntary character of this procedure. This is very sensitive and I give a very crystal clear answer on this topic.”
EU leaders have called on investors to shoulder part of a new aid package for Greece after last year’s 110 billion-euro ($159 billion) rescue failed to stop the spread of Europe’s debt crisis. Participation by Greek banks and pensions funds is key to the success of a plan for investors to roll over as much as 30 billion euros of maturing bonds into longer-term securities.
Greece must avoid having rating companies cut the country to “selective default,” said Venizelos, who is due to hold talks in Berlin tomorrow with German Finance Minister Wolfgang Schaeuble.
“We must take the opportunity but not the risk,” he said. “For us it is very, very important to organize something safe because the Greek problem is always a European problem, a worldwide problem and financial stability in Greece is a key point for financial stability in the euro zone.”
‘Deeper Discussion’
A meeting of euro-area finance ministers on July 11 will be an opportunity for a “deeper discussion” of the rollover plan, he added. That’s the same day Venizelos is due to appoint the board members of an agency overseeing Greece’s 50 billion-euro state-asset sales program, which is key to the country’s second financing package.
Discussions on a loan from the EU and the International Monetary Fund, the third part of the new aid package for the country, can only begin after details of private-sector involvement are thrashed out, he said.
Venizelos dismissed criticism of the privatization plan as unrealistic, saying he’s targeting 1.7 billion euros in revenue from state-asset sales by the end of September.
“I can respect the timetable,” he said, referring to his stint as the minister in charge of preparations for the Athens Olympics in 2004. “I can make delivery on time.”
Greece will meet its goal of achieving a primary surplus next year and in following years, which is “the first condition for the reconstruction of our economy and for the return of Greece to the markets as soon as possible,” Venizelos said.
Under the new aid plan, Greece should seek to tap markets for financing in the second half of 2014.
(Bloomberg)
By Nicole Itano and Maria Petrakis - Jul 5, 2011 4:17 PM GMT+0200 Tue Jul 05 14:17:39 GMT 2011
Greek banks are willing to roll over their government bonds as part of a European Union rescue plan that will keep the country out of financial markets for three years, Finance Minister Evangelos Venizelos said.
“The Greek banks are ready to participate,” he said in an interview with Bloomberg Television in Athens today. “We must respect absolutely the voluntary character of this procedure. This is very sensitive and I give a very crystal clear answer on this topic.”
EU leaders have called on investors to shoulder part of a new aid package for Greece after last year’s 110 billion-euro ($159 billion) rescue failed to stop the spread of Europe’s debt crisis. Participation by Greek banks and pensions funds is key to the success of a plan for investors to roll over as much as 30 billion euros of maturing bonds into longer-term securities.
Greece must avoid having rating companies cut the country to “selective default,” said Venizelos, who is due to hold talks in Berlin tomorrow with German Finance Minister Wolfgang Schaeuble.
“We must take the opportunity but not the risk,” he said. “For us it is very, very important to organize something safe because the Greek problem is always a European problem, a worldwide problem and financial stability in Greece is a key point for financial stability in the euro zone.”
‘Deeper Discussion’
A meeting of euro-area finance ministers on July 11 will be an opportunity for a “deeper discussion” of the rollover plan, he added. That’s the same day Venizelos is due to appoint the board members of an agency overseeing Greece’s 50 billion-euro state-asset sales program, which is key to the country’s second financing package.
Discussions on a loan from the EU and the International Monetary Fund, the third part of the new aid package for the country, can only begin after details of private-sector involvement are thrashed out, he said.
Venizelos dismissed criticism of the privatization plan as unrealistic, saying he’s targeting 1.7 billion euros in revenue from state-asset sales by the end of September.
“I can respect the timetable,” he said, referring to his stint as the minister in charge of preparations for the Athens Olympics in 2004. “I can make delivery on time.”
Greece will meet its goal of achieving a primary surplus next year and in following years, which is “the first condition for the reconstruction of our economy and for the return of Greece to the markets as soon as possible,” Venizelos said.
Under the new aid plan, Greece should seek to tap markets for financing in the second half of 2014.
(Bloomberg)
tommy271
Forumer storico
French, German finance ministers to meet
By Gabriele Parussini
PARIS (MarketWatch) -- French Finance Minister Francois Baroin plans to meet his German counterpart, Wolfgang Schaeuble, this week to discuss a plan to roll over Greece's debt.
The French approach to solving Greece's problems hasn't changed and doesn't include a Greek default, Baroin said, answering a question in parliament.
He said the meeting is set for Thursday.
Schaeuble is also meeting with the Greek finance minister in Berlin Wednesday.
***
In questi giorni, molti incontri in programma.
By Gabriele Parussini
PARIS (MarketWatch) -- French Finance Minister Francois Baroin plans to meet his German counterpart, Wolfgang Schaeuble, this week to discuss a plan to roll over Greece's debt.
The French approach to solving Greece's problems hasn't changed and doesn't include a Greek default, Baroin said, answering a question in parliament.
He said the meeting is set for Thursday.
Schaeuble is also meeting with the Greek finance minister in Berlin Wednesday.
***
In questi giorni, molti incontri in programma.
tommy271
Forumer storico
Bank Credit To Domestic Private Sector Decrease In May
The annual growth rate of total credit granted to the domestic private sector decelerated further to -1.1% in May 2011, from -0.5% in April 2011 and 0.0% in December 2010, the Bank of Greece said. The net flow of total credit to the domestic private sector was negative amounting to € -1,557 million (May 2010: positive net flow of € 167 million).
Credit to enterprises
According to a BoG report, the net flow of credit to enterprises in May 2011 was negative, amounting to € -959 million (May 2010: positive net flow of € 310 million) and the annual growth rate of credit decreased to 0.3% compared to 1.2% in April 2011 (December 2010: 1.1%).
Credit to sole proprietors and unincorporated partnerships
The net flow of credit to sole proprietors and unincorporated partnerships was also negative, amounting to € -165 million in May 2011, and the annual rate of change of credit decreased in comparison with the previous month (May 2011: -3.2%, April 2011: -1.5%, December 2010: 0.3%).
Credit to individuals and private non-profit institutions
In May 2011, the net flow of credit to individuals and private non-profit institutions was negative, amounting to € -433 million (May 2010: € -143 million). As a result, the annual growth rate of credit to individuals and private non-profit institutions decreased further (May 2011: -2.3%, April 2011: -2.1%, December 2010: -1.2%).
(capital.gr)
The annual growth rate of total credit granted to the domestic private sector decelerated further to -1.1% in May 2011, from -0.5% in April 2011 and 0.0% in December 2010, the Bank of Greece said. The net flow of total credit to the domestic private sector was negative amounting to € -1,557 million (May 2010: positive net flow of € 167 million).
Credit to enterprises
According to a BoG report, the net flow of credit to enterprises in May 2011 was negative, amounting to € -959 million (May 2010: positive net flow of € 310 million) and the annual growth rate of credit decreased to 0.3% compared to 1.2% in April 2011 (December 2010: 1.1%).
Credit to sole proprietors and unincorporated partnerships
The net flow of credit to sole proprietors and unincorporated partnerships was also negative, amounting to € -165 million in May 2011, and the annual rate of change of credit decreased in comparison with the previous month (May 2011: -3.2%, April 2011: -1.5%, December 2010: 0.3%).
Credit to individuals and private non-profit institutions
In May 2011, the net flow of credit to individuals and private non-profit institutions was negative, amounting to € -433 million (May 2010: € -143 million). As a result, the annual growth rate of credit to individuals and private non-profit institutions decreased further (May 2011: -2.3%, April 2011: -2.1%, December 2010: -1.2%).
(capital.gr)
tommy271
Forumer storico
I greci in Svizzera preoccupati per la crisi
Di Clare O'Dea, swissinfo.ch
La crisi economica e sociale nella quale è sprofondata la Grecia tocca da vicino anche la comunità ellenica stabilita in Svizzera, che guarda con sgomento a quanto sta succedendo in patria.
Le misure d’austerità accettate una settimana fa dal parlamento greco per soddisfare le richieste del Fondo monetario internazionale e dell’Unione Europea, contestate con violenza ad Atene, hanno trovato ampia eco anche tra la comunità greca in Svizzera.
Le relazioni che molti espatriati intrattengono con il loro Stato d’origine sono ancora molto forti e per questa ragione la diaspora segue da vicino gli eventi, afferma Achille Paparsenos, della missione permanente della Grecia presso l’ONU a Ginevra.
«La democrazia è nata in Grecia e ai greci piace dibattere e sono ancora molto attaccati alla loro terra d’origine. Molti di loro rientrano in patria in maniera regolare e sono sempre molto interessati a quanto accade», spiega Paparsenos.
Responsabilità condivise
Capo economista presso la Banca cantonale di Zurigo, Anastassios Frangulidis è sicuramente uno degli espatriati greci più qualificati per parlare della situazione in cui versa il suo paese. Secondo Frangulidis, dare la colpa unicamente al governo è troppo semplice.
«Tutta la società ha una parte di responsabilità. Negli ultimi 30 anni il potere non è stato nelle mani di un unico governo. In un sistema democratico, la popolazione ha il governo che si merita», afferma Frangulidis.
I problemi attuali sono il risultato di un periodo durante il quale i greci hanno vissuto al di sopra delle loro possibilità. «Anno dopo anno ciò ha provocato un aumento del deficit, per coprire il quale si è fatto ricorso ai fondi provenienti dall’estero, a tassi d’interesse molto bassi, fino alla crisi economica del 2008/2009», aggiunge l’economista.
Riuscendo a far passare – seppur di stretta misura – il doloroso pacchetto di misure d’austerità, il governo greco ha guadagnato un po’ di tempo. «Nei prossimi mesi la Grecia sopravvivrà e non sarà in bancarotta quest’estate. I problemi però rimangono. L’accordo con l’UE e l’FMI fa sì che i greci dovranno rimboccarsi le maniche», osserva Frangulidis.
Anche se da ormai 20 anni vive all’estero, Frangulidis è rattristato per la situazione in cui versa il suo paese e ritiene «comprensibile» l’ira dei dimostranti. «Per me la crisi greca non è solo una questione di cifre. Conosco la gente e vedo i problemi ai quali è confrontata», afferma.
Stretti legami
Theocharis Nastos, dell’associazione greca epirota svizzera, vive nella Confederazione dal 1972, ma continua a seguire con attenzione l’attualità del suo paese. Nastos, vedendo alcuni membri della sua famiglia in difficoltà finanziarie, punta il dito soprattutto contro il governo.
«Ho costruito una casa in Grecia e ho ancora molti legami con la mia regione d’origine, al pari di numerosi miei compatrioti che vivono qui a Zurigo. La crisi è un tema che ci tocca da vicino. Mio fratello, ad esempio, ha dovuto chiudere il suo negozio di scarpe».
L’associazione conta 120 membri, originari dell’Epiro, regione della Grecia nord-occidentale. Oltre ad organizzare feste culturali e religiose, offre ai giovani la possibilità di seguire corsi di lingua o di danza tradizionale.
La comunità ellenica svizzera (6'700 persone a fine 2009) è molto attiva e ben organizzata, con circa 40 club e associazioni, stando a quanto indicato dall’ambasciata di Grecia a Berna. La maggior parte degli espatriati vive a Zurigo. Importanti comunità sono presenti anche a Ginevra e Losanna.
«Un significativo gruppo di emigranti greci è arrivato in Svizzera negli anni ’60 ed oggi molti, tra cui diverse persone che fanno parte della terza generazione, occupano posizioni di rilievo in società svizzere», afferma una dipendente dell’ambasciata, che preferisce non menzionare il suo nome.
«Vi sono molti avvocati, dottori e scienziati; solo al Cern di Ginevra lavorano 17 scienziati greci. Vi sono anche politici di origine greca, come ad esempio Josef Zisyadis, nonché persone importanti nei settori del commercio e della finanzia», aggiunge.
Nuova ondata migratoria?
Come molti altri emigranti, Athanasios Komninos non pensava di rimanere a lungo in Svizzera. Inizialmente, la sua idea era di venire per un anno per imparare il tedesco ed aumentare così le sue possibilità di lavorare nel settore turistico una volta rientrato a casa.
Venticinque anni dopo è ancora in Svizzera, a Berna per la precisione, dove gestisce un ristorante greco. «A casa» ritorna due volte all’anno, ma non ha più l’intenzione di viverci definitivamente.
«Sono venuto qui di mia spontanea volontà e in Svizzera ormai mi sento altrettanto bene che in Grecia, se non addirittura di più».
Athanasios Komninos è piuttosto pessimista in merito alla crisi che sta attraversando il suo paese. «È una crisi grave e lo diventerà ancor di più. Molte persone cercheranno sicuramente di lasciare la Grecia, ma dove andranno? Andranno in posti dove vi sono già molti greci, come la Germania e l’Olanda».
Per la Svizzera il numero di richieste non ha registrato nessun cambiamento significativo, stando a quanto indica l’ambasciata. «La Svizzera è sempre una meta dove stabilirsi. Non vi è però nessun aumento del numero di persone che chiede informazioni per emigrare nella Confederazione».
Clare O'Dea, swissinfo.ch
Di Clare O'Dea, swissinfo.ch
La crisi economica e sociale nella quale è sprofondata la Grecia tocca da vicino anche la comunità ellenica stabilita in Svizzera, che guarda con sgomento a quanto sta succedendo in patria.
Le misure d’austerità accettate una settimana fa dal parlamento greco per soddisfare le richieste del Fondo monetario internazionale e dell’Unione Europea, contestate con violenza ad Atene, hanno trovato ampia eco anche tra la comunità greca in Svizzera.
Le relazioni che molti espatriati intrattengono con il loro Stato d’origine sono ancora molto forti e per questa ragione la diaspora segue da vicino gli eventi, afferma Achille Paparsenos, della missione permanente della Grecia presso l’ONU a Ginevra.
«La democrazia è nata in Grecia e ai greci piace dibattere e sono ancora molto attaccati alla loro terra d’origine. Molti di loro rientrano in patria in maniera regolare e sono sempre molto interessati a quanto accade», spiega Paparsenos.
Responsabilità condivise
Capo economista presso la Banca cantonale di Zurigo, Anastassios Frangulidis è sicuramente uno degli espatriati greci più qualificati per parlare della situazione in cui versa il suo paese. Secondo Frangulidis, dare la colpa unicamente al governo è troppo semplice.
«Tutta la società ha una parte di responsabilità. Negli ultimi 30 anni il potere non è stato nelle mani di un unico governo. In un sistema democratico, la popolazione ha il governo che si merita», afferma Frangulidis.
I problemi attuali sono il risultato di un periodo durante il quale i greci hanno vissuto al di sopra delle loro possibilità. «Anno dopo anno ciò ha provocato un aumento del deficit, per coprire il quale si è fatto ricorso ai fondi provenienti dall’estero, a tassi d’interesse molto bassi, fino alla crisi economica del 2008/2009», aggiunge l’economista.
Riuscendo a far passare – seppur di stretta misura – il doloroso pacchetto di misure d’austerità, il governo greco ha guadagnato un po’ di tempo. «Nei prossimi mesi la Grecia sopravvivrà e non sarà in bancarotta quest’estate. I problemi però rimangono. L’accordo con l’UE e l’FMI fa sì che i greci dovranno rimboccarsi le maniche», osserva Frangulidis.
Anche se da ormai 20 anni vive all’estero, Frangulidis è rattristato per la situazione in cui versa il suo paese e ritiene «comprensibile» l’ira dei dimostranti. «Per me la crisi greca non è solo una questione di cifre. Conosco la gente e vedo i problemi ai quali è confrontata», afferma.
Stretti legami
Theocharis Nastos, dell’associazione greca epirota svizzera, vive nella Confederazione dal 1972, ma continua a seguire con attenzione l’attualità del suo paese. Nastos, vedendo alcuni membri della sua famiglia in difficoltà finanziarie, punta il dito soprattutto contro il governo.
«Ho costruito una casa in Grecia e ho ancora molti legami con la mia regione d’origine, al pari di numerosi miei compatrioti che vivono qui a Zurigo. La crisi è un tema che ci tocca da vicino. Mio fratello, ad esempio, ha dovuto chiudere il suo negozio di scarpe».
L’associazione conta 120 membri, originari dell’Epiro, regione della Grecia nord-occidentale. Oltre ad organizzare feste culturali e religiose, offre ai giovani la possibilità di seguire corsi di lingua o di danza tradizionale.
La comunità ellenica svizzera (6'700 persone a fine 2009) è molto attiva e ben organizzata, con circa 40 club e associazioni, stando a quanto indicato dall’ambasciata di Grecia a Berna. La maggior parte degli espatriati vive a Zurigo. Importanti comunità sono presenti anche a Ginevra e Losanna.
«Un significativo gruppo di emigranti greci è arrivato in Svizzera negli anni ’60 ed oggi molti, tra cui diverse persone che fanno parte della terza generazione, occupano posizioni di rilievo in società svizzere», afferma una dipendente dell’ambasciata, che preferisce non menzionare il suo nome.
«Vi sono molti avvocati, dottori e scienziati; solo al Cern di Ginevra lavorano 17 scienziati greci. Vi sono anche politici di origine greca, come ad esempio Josef Zisyadis, nonché persone importanti nei settori del commercio e della finanzia», aggiunge.
Nuova ondata migratoria?
Come molti altri emigranti, Athanasios Komninos non pensava di rimanere a lungo in Svizzera. Inizialmente, la sua idea era di venire per un anno per imparare il tedesco ed aumentare così le sue possibilità di lavorare nel settore turistico una volta rientrato a casa.
Venticinque anni dopo è ancora in Svizzera, a Berna per la precisione, dove gestisce un ristorante greco. «A casa» ritorna due volte all’anno, ma non ha più l’intenzione di viverci definitivamente.
«Sono venuto qui di mia spontanea volontà e in Svizzera ormai mi sento altrettanto bene che in Grecia, se non addirittura di più».
Athanasios Komninos è piuttosto pessimista in merito alla crisi che sta attraversando il suo paese. «È una crisi grave e lo diventerà ancor di più. Molte persone cercheranno sicuramente di lasciare la Grecia, ma dove andranno? Andranno in posti dove vi sono già molti greci, come la Germania e l’Olanda».
Per la Svizzera il numero di richieste non ha registrato nessun cambiamento significativo, stando a quanto indica l’ambasciata. «La Svizzera è sempre una meta dove stabilirsi. Non vi è però nessun aumento del numero di persone che chiede informazioni per emigrare nella Confederazione».
Clare O'Dea, swissinfo.ch
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tommy271
Forumer storico
Analysis: Default needed to lure long-term buyers back to Greece
By Marius Zaharia
LONDON | Tue Jul 5, 2011 10:44am EDT
LONDON (Reuters) - Long-term investors standing aloof from the Greek debt crisis want holders of its government bonds to take a loss big enough to slash the country's debt to sustainable levels before they consider returning.
Greece is still expected to default at some point and for most investors who have dumped bonds over the past two years and who are crucial to put the ailing economy back on its feet, the longer that is delayed, the longer it will be before they consider looking at Greek assets again.
A likely second bailout -- currently under tortuous negotiation -- is seen only as a means to buy time for euro zone banks to provision for eventual losses and protect the bloc's larger economies from contamination, while the reforms attached to the package will be hard to implement in the face of deepening public resentment.
"We would buy if the economy manages to reform itself and if the banking sector is self-funded, but I don't think that's going to happen on a five-year view," said Russell Silberston, head of global interest rates at Investec Asset Management, who manages $31 billion worth of fixed income assets globally.
"Our view is they also need to default before that."
Greek Finance Minister Evangelos Venizelos told Reuters on Monday he intended to return to market funding in the middle of 2014.
Most investors don't think that will happen without a major restructuring to make Greece's debt mountain sustainable and remove it from the downward spiral of constant deficit-cutting which will wreck any chance of economic recovery.
"For Greece, starting over is the only solution," said Kommer van Trigt, a bond fund manager with Robeco Group, managing about 40 billion euros ($57 billion)
Silberston said the "first default" was near as France's proposal for a voluntary rollover of Greek debt seemed to be gathering momentum. But that would not solve Greece's solvency problem.
With debt expected to reach 1.6 times its 2011 economic output, economists say Greece would need a primary budget surplus of about 5 percent of gross domestic product, compared with last year's 5 percent primary deficit, simply to stabilize its debt at current levels.
On the assumption that Greece's debt-to-GDP ratio would peak at 166 percent, Evolution Securities calculations show a haircut of about 64 percent would be needed to bring the ratio back to the ceiling of 60 percent agreed in the EU'S Maastricht Treaty.
The Greek debt curve fully prices in a 50 percent haircut on average, according to UniCredit. But imposing losses on bondholders before gaining credibility may be in vain.
Investec's Silberston said besides a haircut, he would want to see several quarters of primary budget surpluses achieved in a sustainable way -- and not through privatization revenues -- before buying Greek debt.
"The big problem with a major haircut is that ... you would still need to have a very high premium for people to buy Greek debt after that date because if you look historically at haircuts, they tend not to be in isolation," said Jack Kelly, an investment director on global government bonds at Standard Life Investments, which manages assets worth 157 billion pounds ($250 billion).
CHEAP IS NOT ENOUGH
After an immediate Greek default was avoided with 12 billion euros of emergency loans and a fresh round of belt-tightening measures agreed in Athens, yields on some of its debt have fallen by more than 200 basis points.
But at over 27 percent for two-year paper and 16 percent for the 10-year they are still punishingly high. Only short-term investors were behind the rally, which was also exacerbated by thin volumes.
Kelly said Standard Life, which sold its last holdings of Greek debt in June 2010, would only buy it back if it reached investment grade again or as part of a EU common bond, something Germany has ruled out.
Although rated above junk, Portugal and Ireland, the other bailed out countries in the euro zone, are also considered a no-go by long-term debt investors because of the risk they will be dragged down with the Greek crisis.
But those countries have a chance to turn things around faster than Greece. The best placed is Ireland, whose exports are more competitive and its labor markets more flexible.
"The numbers are a bit better for Portugal and Ireland," said van Trigt at Robeco Group. "At this point we are not really differentiating between Greece, Ireland and Portugal. Going forward, a country like Ireland has a better starting position."
THE RIGHT PRICE
With the timing and magnitude of any Greek debt haircut hard to predict because politics plays a greater role than mathematics, it is hard to assess what price would draw investors back into Greece.
A common comparison is Uruguay's debt restructuring in 2003, when the price for its 2012 bond rose from about 40 to 60 cents in the dollar immediately after the event.
Greece's June 2020 bond trades at 55 cents in the euro.
"At prices of under 50, there will be value in eight- or nine-year (Greek) bonds at some stage," said Ciaran O'Hagan, strategist at Societe Generale. "But only when accounts are rendered sustainable, e.g. through restructuring."
That only holds good if Greece avoids a unilateral and disorderly default like Argentina's in 2002. It organized large debt swaps in 2005 and 2010 yet is still shut out of debt markets.
Market pricing before any haircut could offer opportunities to buy on the view that Greek bondholders were too pessimistic about the extent of such a move. But it would not help Greece, as those investors may bail out soon afterwards and their spending would be small.
"Those would only be incredibly hot money," said Robert Talbut, chief investment officer at Royal London Asset Management, which runs assets worth 40 billion pounds ($64 billion). He added he would not take that risk. ($1 = 0.626 British Pounds) ($1 = 0.705 Euros)
By Marius Zaharia
LONDON | Tue Jul 5, 2011 10:44am EDT
LONDON (Reuters) - Long-term investors standing aloof from the Greek debt crisis want holders of its government bonds to take a loss big enough to slash the country's debt to sustainable levels before they consider returning.
Greece is still expected to default at some point and for most investors who have dumped bonds over the past two years and who are crucial to put the ailing economy back on its feet, the longer that is delayed, the longer it will be before they consider looking at Greek assets again.
A likely second bailout -- currently under tortuous negotiation -- is seen only as a means to buy time for euro zone banks to provision for eventual losses and protect the bloc's larger economies from contamination, while the reforms attached to the package will be hard to implement in the face of deepening public resentment.
"We would buy if the economy manages to reform itself and if the banking sector is self-funded, but I don't think that's going to happen on a five-year view," said Russell Silberston, head of global interest rates at Investec Asset Management, who manages $31 billion worth of fixed income assets globally.
"Our view is they also need to default before that."
Greek Finance Minister Evangelos Venizelos told Reuters on Monday he intended to return to market funding in the middle of 2014.
Most investors don't think that will happen without a major restructuring to make Greece's debt mountain sustainable and remove it from the downward spiral of constant deficit-cutting which will wreck any chance of economic recovery.
"For Greece, starting over is the only solution," said Kommer van Trigt, a bond fund manager with Robeco Group, managing about 40 billion euros ($57 billion)
Silberston said the "first default" was near as France's proposal for a voluntary rollover of Greek debt seemed to be gathering momentum. But that would not solve Greece's solvency problem.
With debt expected to reach 1.6 times its 2011 economic output, economists say Greece would need a primary budget surplus of about 5 percent of gross domestic product, compared with last year's 5 percent primary deficit, simply to stabilize its debt at current levels.
On the assumption that Greece's debt-to-GDP ratio would peak at 166 percent, Evolution Securities calculations show a haircut of about 64 percent would be needed to bring the ratio back to the ceiling of 60 percent agreed in the EU'S Maastricht Treaty.
The Greek debt curve fully prices in a 50 percent haircut on average, according to UniCredit. But imposing losses on bondholders before gaining credibility may be in vain.
Investec's Silberston said besides a haircut, he would want to see several quarters of primary budget surpluses achieved in a sustainable way -- and not through privatization revenues -- before buying Greek debt.
"The big problem with a major haircut is that ... you would still need to have a very high premium for people to buy Greek debt after that date because if you look historically at haircuts, they tend not to be in isolation," said Jack Kelly, an investment director on global government bonds at Standard Life Investments, which manages assets worth 157 billion pounds ($250 billion).
CHEAP IS NOT ENOUGH
After an immediate Greek default was avoided with 12 billion euros of emergency loans and a fresh round of belt-tightening measures agreed in Athens, yields on some of its debt have fallen by more than 200 basis points.
But at over 27 percent for two-year paper and 16 percent for the 10-year they are still punishingly high. Only short-term investors were behind the rally, which was also exacerbated by thin volumes.
Kelly said Standard Life, which sold its last holdings of Greek debt in June 2010, would only buy it back if it reached investment grade again or as part of a EU common bond, something Germany has ruled out.
Although rated above junk, Portugal and Ireland, the other bailed out countries in the euro zone, are also considered a no-go by long-term debt investors because of the risk they will be dragged down with the Greek crisis.
But those countries have a chance to turn things around faster than Greece. The best placed is Ireland, whose exports are more competitive and its labor markets more flexible.
"The numbers are a bit better for Portugal and Ireland," said van Trigt at Robeco Group. "At this point we are not really differentiating between Greece, Ireland and Portugal. Going forward, a country like Ireland has a better starting position."
THE RIGHT PRICE
With the timing and magnitude of any Greek debt haircut hard to predict because politics plays a greater role than mathematics, it is hard to assess what price would draw investors back into Greece.
A common comparison is Uruguay's debt restructuring in 2003, when the price for its 2012 bond rose from about 40 to 60 cents in the dollar immediately after the event.
Greece's June 2020 bond trades at 55 cents in the euro.
"At prices of under 50, there will be value in eight- or nine-year (Greek) bonds at some stage," said Ciaran O'Hagan, strategist at Societe Generale. "But only when accounts are rendered sustainable, e.g. through restructuring."
That only holds good if Greece avoids a unilateral and disorderly default like Argentina's in 2002. It organized large debt swaps in 2005 and 2010 yet is still shut out of debt markets.
Market pricing before any haircut could offer opportunities to buy on the view that Greek bondholders were too pessimistic about the extent of such a move. But it would not help Greece, as those investors may bail out soon afterwards and their spending would be small.
"Those would only be incredibly hot money," said Robert Talbut, chief investment officer at Royal London Asset Management, which runs assets worth 40 billion pounds ($64 billion). He added he would not take that risk. ($1 = 0.626 British Pounds) ($1 = 0.705 Euros)
tommy271
Forumer storico
Greek Banks Dragged ASE Down In Thin Trade
Greek banks’ “deferred” correction and PPC’s losses led the General Index of ASE into losses below 1,290 on Tuesday, while the turnover stood at very low levels.
Viohalco and Mytilineos topped FSTE20, while on the other hand ATEBank recorded an 11.60% drop, following profits of 45.97% in the last three sessions.
The negotiations on the terms of participation of private institutional investors in the rollover of Greek debt and the reactions of the rating agencies towards the French plan are still on the market’s focus, analysts commented.
They consider the profit-taking moves that occurred today as anticipated and expect the traditional summer weakness to become gradually more noticeable on the Greek board.
"Even though we fell below the psychological 1,300 point level, the market is kind of searching for direction," a local analyst told Dow Jones Newswires. "And the turnover today is pitiful."
On the board, the General Index ended with losses of 1.39% at 1,288.32 units, after a fluctuation into a margin of 23 units. On Tuesday, approximately 16.59 million units worth €53.87 million traded, while a total amount of 70 shares declined, 68 rose and 142 remained unchanged.
Banks’ fluctuation was stronger, ending at 1,000.66 units, with losses of 2.84%, just above session low.
On FTSE20, Viohalco and Mytilineos recorded profits of 3.19% and 1.03% at €4.2 and €4.9 respectively, while Motor Oil and Ellaktor gained 0.93% and 0.81% respectively.
On the other hand, besides ATEBanks, PPC and Alpha Bank fell by 6.57% and 4.32%. National Bank declined by 2.88% at €5.05, while Bank of Cyprus posted losses of 2.40% at €2.03.
(capital.gr)
Greek banks’ “deferred” correction and PPC’s losses led the General Index of ASE into losses below 1,290 on Tuesday, while the turnover stood at very low levels.
Viohalco and Mytilineos topped FSTE20, while on the other hand ATEBank recorded an 11.60% drop, following profits of 45.97% in the last three sessions.
The negotiations on the terms of participation of private institutional investors in the rollover of Greek debt and the reactions of the rating agencies towards the French plan are still on the market’s focus, analysts commented.
They consider the profit-taking moves that occurred today as anticipated and expect the traditional summer weakness to become gradually more noticeable on the Greek board.
"Even though we fell below the psychological 1,300 point level, the market is kind of searching for direction," a local analyst told Dow Jones Newswires. "And the turnover today is pitiful."
On the board, the General Index ended with losses of 1.39% at 1,288.32 units, after a fluctuation into a margin of 23 units. On Tuesday, approximately 16.59 million units worth €53.87 million traded, while a total amount of 70 shares declined, 68 rose and 142 remained unchanged.
Banks’ fluctuation was stronger, ending at 1,000.66 units, with losses of 2.84%, just above session low.
On FTSE20, Viohalco and Mytilineos recorded profits of 3.19% and 1.03% at €4.2 and €4.9 respectively, while Motor Oil and Ellaktor gained 0.93% and 0.81% respectively.
On the other hand, besides ATEBanks, PPC and Alpha Bank fell by 6.57% and 4.32%. National Bank declined by 2.88% at €5.05, while Bank of Cyprus posted losses of 2.40% at €2.03.
(capital.gr)
tommy271
Forumer storico
European Banks Set for Greece Discussion
By SEBASTIAN MOFFETT
PARIS—European banks are set to gather Wednesday in Paris as they discuss how to participate in a second rescue plan for Greece without triggering a default, a day ahead of a meeting between France's new Finance Minister François Baroin and his German counterpart also on Greek debt.
The meeting of banks will bring together private-sector creditors and be chaired by Institute of International Finance Managing Director Charles Dallara, an IIF spokesman said. It will be one in a series of meetings coordinated by the Washington-based association, which consists of more than 400 financial institutions world-wide. The meetings are running in tandem with technical discussions since an IIF meeting in Rome last Monday, the spokesman said.
In his first public address since taking over the finance ministry post, Mr. Baroin called on Tuesday for as much private-sector involvement as possible in a solution to Greece's debt crisis. "The Greek economy will also benefit from support from the private sector, according to terms that are still to be defined," Mr. Baroin told the annual Europlace financial forum in Paris. "I would like it to be as large as possible, and still on a voluntary basis."
European governments want private creditors to take part in a rescue package, fearing a backlash from taxpayers if the governments agreed to finance the whole package. However, private-sector participation carries the risk that credit-rating agencies will declare a default. Standard and Poor's said Monday that a recently-floated French plan would leave participating bondholders worse off, and therefore would probably lead to Greece being declared in "selective default."
A default by the Greek government might mean that Greek banks could no longer use their holdings of Greek sovereign debt as collateral for European Central Bank monetary operations; and it would raise the possibility of panicked investors withdrawing funds from larger euro-zone countries such as Spain.
Discussions on Greece this week are expected to center on the plan to roll over Greek debt that was floated by French banks.
Greece has €64 billion ($93.05 billion) of benchmark bonds coming due in the next three years, and the main option in the French proposal is for holders of maturing bonds to agree to reinvest half the proceeds in 30-year Greek bonds. This would have a base interest rate of 5.5%, which would rise as far as 8% if the Greek economy grows. An additional 20% of proceeds from the maturing debt would be invested in top-quality bonds that pay no annual interest but increase in value yearly.
France has insisted, alongside the European Central Bank, that any involvement of the private sector must not constitute a default, a stance Mr. Baroin reiterated. "We will take all the necessary measures so that there is no payment default and there is a very direct line with the European Central Bank, and so that all that is done on a voluntary basis," he told business leaders and bankers at a conference in Paris.
Wolfgang Schäuble, the German finance minister, said last week he had reached agreement with German banks on private-sector participation in a new assistance program based on the French scheme.
(The Wall Street Journal)
By SEBASTIAN MOFFETT
PARIS—European banks are set to gather Wednesday in Paris as they discuss how to participate in a second rescue plan for Greece without triggering a default, a day ahead of a meeting between France's new Finance Minister François Baroin and his German counterpart also on Greek debt.
The meeting of banks will bring together private-sector creditors and be chaired by Institute of International Finance Managing Director Charles Dallara, an IIF spokesman said. It will be one in a series of meetings coordinated by the Washington-based association, which consists of more than 400 financial institutions world-wide. The meetings are running in tandem with technical discussions since an IIF meeting in Rome last Monday, the spokesman said.
In his first public address since taking over the finance ministry post, Mr. Baroin called on Tuesday for as much private-sector involvement as possible in a solution to Greece's debt crisis. "The Greek economy will also benefit from support from the private sector, according to terms that are still to be defined," Mr. Baroin told the annual Europlace financial forum in Paris. "I would like it to be as large as possible, and still on a voluntary basis."
European governments want private creditors to take part in a rescue package, fearing a backlash from taxpayers if the governments agreed to finance the whole package. However, private-sector participation carries the risk that credit-rating agencies will declare a default. Standard and Poor's said Monday that a recently-floated French plan would leave participating bondholders worse off, and therefore would probably lead to Greece being declared in "selective default."
A default by the Greek government might mean that Greek banks could no longer use their holdings of Greek sovereign debt as collateral for European Central Bank monetary operations; and it would raise the possibility of panicked investors withdrawing funds from larger euro-zone countries such as Spain.
Discussions on Greece this week are expected to center on the plan to roll over Greek debt that was floated by French banks.
Greece has €64 billion ($93.05 billion) of benchmark bonds coming due in the next three years, and the main option in the French proposal is for holders of maturing bonds to agree to reinvest half the proceeds in 30-year Greek bonds. This would have a base interest rate of 5.5%, which would rise as far as 8% if the Greek economy grows. An additional 20% of proceeds from the maturing debt would be invested in top-quality bonds that pay no annual interest but increase in value yearly.
France has insisted, alongside the European Central Bank, that any involvement of the private sector must not constitute a default, a stance Mr. Baroin reiterated. "We will take all the necessary measures so that there is no payment default and there is a very direct line with the European Central Bank, and so that all that is done on a voluntary basis," he told business leaders and bankers at a conference in Paris.
Wolfgang Schäuble, the German finance minister, said last week he had reached agreement with German banks on private-sector participation in a new assistance program based on the French scheme.
(The Wall Street Journal)
tommy271
Forumer storico
Allianz to commit €300m to Greek rescue
05 July 2011
The insurer will be among the German companies taking part in the Greek bailout.
German insurer Allianz will be contributing €300m ($436m) to rescue Greece from the economic meltdown, said Michael Diekmann Allianz CEO.
05 July 2011
The insurer will be among the German companies taking part in the Greek bailout.
German insurer Allianz will be contributing €300m ($436m) to rescue Greece from the economic meltdown, said Michael Diekmann Allianz CEO.
- Stato
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