tommy271
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Greek PM Meets With EU Leaders, PSI Program Under English Law
The importance of meetings of Greek Prime Minister today and tomorrow in Brussels and Luxembourg is undoubtedly related to the processes for the release of the sixth aid instalment.
Diplomatic sources in Brussels appear rather optimistic that there would be a happy end no later than late November, although Germany insists on written commitments by Greek political parties.
However, Lucas Papademos is not concerned only about the release of the instalment, but also about the negotiations on the program of bond swaps, which provides a haircut of old bonds by 50%.
The IFF insists on high interest rates and collaterals and focuses on the legal status of the new bonds.
Bankers seek new bonds to be issued under the Anglo-Saxon law rather than the Greek, unlike the old –under haircut- bonds (€205 billion).
Under the Greek law, Greece could change at any given time the conditions for repayment of issued bonds.
Under the Anglo-Saxon law, the Greek government couldn’t impose any change either in terms of repayment or the currency.
In other words, Greece is committed for the next 30 years (this would be the maturity of new government bonds) to repay in euro, and the government would not be able to affect this commitment in any way.
Already another part of the sovereign debt related to bilateral loans to Eurozone member states has been converted to debt under the Anglo-Saxon legal system.
In case, Greece is forced to change its currency either by choice or by coercion, it would be required to repay in euro or “in kind”. It would be a unique case of a country with the vast majority of debt out of control.
(capital.gr)
The importance of meetings of Greek Prime Minister today and tomorrow in Brussels and Luxembourg is undoubtedly related to the processes for the release of the sixth aid instalment.
Diplomatic sources in Brussels appear rather optimistic that there would be a happy end no later than late November, although Germany insists on written commitments by Greek political parties.
However, Lucas Papademos is not concerned only about the release of the instalment, but also about the negotiations on the program of bond swaps, which provides a haircut of old bonds by 50%.
The IFF insists on high interest rates and collaterals and focuses on the legal status of the new bonds.
Bankers seek new bonds to be issued under the Anglo-Saxon law rather than the Greek, unlike the old –under haircut- bonds (€205 billion).
Under the Greek law, Greece could change at any given time the conditions for repayment of issued bonds.
Under the Anglo-Saxon law, the Greek government couldn’t impose any change either in terms of repayment or the currency.
In other words, Greece is committed for the next 30 years (this would be the maturity of new government bonds) to repay in euro, and the government would not be able to affect this commitment in any way.
Already another part of the sovereign debt related to bilateral loans to Eurozone member states has been converted to debt under the Anglo-Saxon legal system.
In case, Greece is forced to change its currency either by choice or by coercion, it would be required to repay in euro or “in kind”. It would be a unique case of a country with the vast majority of debt out of control.
(capital.gr)
