Suspense not over on Athens’ debt

Published on 7 March 2012 at 11:32

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"Final struggle at the barber's door," [runs a headline in Greek daily Ta Nea](http:// http://www.tanea.gr/ellada/article/?aid=4700116), referring to the last 'hair cut' accorded to Greece, on a voluntary basis, by private creditors. "The plan must be finalised by Thursday night. Already, the country's 'major' creditors are on board for the hair cut operation," the paper says —

But Greek debt holders are still reluctant to agree to a 53.5% cut in the worth of their Greek bond holdings. [...] For the moment, the banks, insurance companies and pension funds hold about €45 billion in bonds but that should change. The goal is to reach €154.4 billion. [...] The government, in particular the Minister of Finance, Evangelos Venizelos, is confident that the operation will be successful. It hopes that creditor participation will reach 75% of the €206 billion in outstanding Greek bonds.

French financial daily Les Echos is, for its part, concerned about the conditions of the exchange which, it says could fall short of its goal of preventing the country's default. The paper says that -

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In the case of participation of between 75% to 90%, two options are foreseeable. Either the exchange is voluntary, the others hoping to be fully remunerated on the due date. Or the collective action clause (CAC) is used, thus forcing Greek debt holders [...] to accept the exchange. In that case, "participation is no longer totally voluntary and the European Union and Greece could very well consider that the parameters of the exchange should be revised," explains Jean Lemierre, an advisor to the private creditors.

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