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INTERVIEW: Roland Berger Promotes Alternative To Greek Haircut
By Eyk Henning and Alexandra Edinger
Of DOW JONES NEWSWIRES
FRANKFURT (Dow Jones)--German consulting agency Roland Berger warned an additional haircut on Greece sovereign bonds would have "very negative consequences" and instead promoted a plan that foresees cutting the ailing country's debt by selling state owned assets worth EUR125 billion to a European trustee.
"The additional haircut under discussion could be counterproductive and would not restore investors confidence," Markus Krall, senior partner with Roland Berger Strategy Consultants, told Dow Jones Newswires Tuesday.
Private investors in July had agreed to exchange their bonds for new debt and write down their holdings by 21%. However, recently euro-zone and International Monetary Fund officials appear to have called for a "hard restructuring" of Greek debt that would see bondholders getting only half the face value of their bonds.
Instead of pushing for a harder haircut for private investors, Roland Berger is promoting its plan "Eureca," a proposal it launched at the end of September. The plan foresees Greece to transfer publicly held assets of EUR125 billion to a special-purpose vehicle run by a trustee.
The proceeds from the transfer would be used to immediately buy back Greek bonds from the European Central Bank and other European institutions or states and thus slash the country's debt burden to EUR225 billion, or less than 90% of gross domestic product from 150%. The transferred assets would serve as a collateral until they are sold. As a result, Greek debt would be granted a AAA rating, reducing funding costs, Krall said.
Krall said several Greek government officials in recent talks embraced the concept as it isn't perceived as a "selloff of their country." Media reports saying the plan was to be put on place lifted the Greek stock market by 5%, he said, adding that there is a good chance the Greek government will opt to implement Eureca following negotiations with the opposition this week. "In that case the EU would be well advised to adopt the concept," he said.
Under the plan, the trustee wouldn't have to sell the assets until 2025, giving it much more time than under the current schedule for Greece. So far, the Greek government has agreed to privatize government-held assets worth EUR50 billion by 2015.
Krall said the old figure is too low as it is based on a worst-case scenario. "If you want to sell assets in a short period of time at a good price, you have to avoid fixed sales closure dates to reduce market pressure," Krall said.
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Progetto Eu.Re.Ca.
By Eyk Henning and Alexandra Edinger
Of DOW JONES NEWSWIRES
FRANKFURT (Dow Jones)--German consulting agency Roland Berger warned an additional haircut on Greece sovereign bonds would have "very negative consequences" and instead promoted a plan that foresees cutting the ailing country's debt by selling state owned assets worth EUR125 billion to a European trustee.
"The additional haircut under discussion could be counterproductive and would not restore investors confidence," Markus Krall, senior partner with Roland Berger Strategy Consultants, told Dow Jones Newswires Tuesday.
Private investors in July had agreed to exchange their bonds for new debt and write down their holdings by 21%. However, recently euro-zone and International Monetary Fund officials appear to have called for a "hard restructuring" of Greek debt that would see bondholders getting only half the face value of their bonds.
Instead of pushing for a harder haircut for private investors, Roland Berger is promoting its plan "Eureca," a proposal it launched at the end of September. The plan foresees Greece to transfer publicly held assets of EUR125 billion to a special-purpose vehicle run by a trustee.
The proceeds from the transfer would be used to immediately buy back Greek bonds from the European Central Bank and other European institutions or states and thus slash the country's debt burden to EUR225 billion, or less than 90% of gross domestic product from 150%. The transferred assets would serve as a collateral until they are sold. As a result, Greek debt would be granted a AAA rating, reducing funding costs, Krall said.
Krall said several Greek government officials in recent talks embraced the concept as it isn't perceived as a "selloff of their country." Media reports saying the plan was to be put on place lifted the Greek stock market by 5%, he said, adding that there is a good chance the Greek government will opt to implement Eureca following negotiations with the opposition this week. "In that case the EU would be well advised to adopt the concept," he said.
Under the plan, the trustee wouldn't have to sell the assets until 2025, giving it much more time than under the current schedule for Greece. So far, the Greek government has agreed to privatize government-held assets worth EUR50 billion by 2015.
Krall said the old figure is too low as it is based on a worst-case scenario. "If you want to sell assets in a short period of time at a good price, you have to avoid fixed sales closure dates to reduce market pressure," Krall said.
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Progetto Eu.Re.Ca.
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ribadisco la mia posizione ottimale, anche se dovesse manifestarsi una situazione pessima come questa o migliore come in passato è sempre stata immutata; uno o due btp e 2 azioni alto div...buona sera
