Greece hails ‘historic’ bond swap agreements

9 Mar 12
Greece has announced the restructuring of €197bn of its private sector debt to pave the way for its next tranche of bailout funds.

By Nick Mann | 9 March 2012

Greece has announced the restructuring of €197bn of its private sector debt to pave the way for its next tranche of bailout funds.

Under the agreement, the value of €152bn worth of Greek government bonds will be written down by up to 75%, with the agreement of the holders. Creditors holding €20bn worth of Greek bonds issued by state enterprises or through foreign markets also agreed to take part in the deal. Greece now plans to force creditors holding a further €25bn of government bonds to take part in the action.

The Greek government said today that the total deal represents 95.7% of its bond debt.

Evangelos Venizelos, the deputy prime minister and finance minister, said: ‘On behalf of the republic, I wish to express my appreciation to all of our creditors who have supported our ambitious program of reform and adjustment and who have shared the sacrifices of the Greek people in this historic endeavour. 

‘With the support of our official sector and private creditors, Greece will continue implementing the measures needed to achieve the fiscal adjustments and structural reforms to which it has committed, and that will return Greece to a path of sustainable growth.’

European Parliament president Martin Schulz welcomed the agreement as a ‘major step’ towards bringing Greek debt down to sustainable levels and restoring stability in the eurozone. Securing the agreement was one of the pre-conditions of Greece receiving a €130bn bailout from the ‘troika’ of the International Monetary Fund, European Central Bank and European Commission.

Olli Rehn, vice president of the European Commission, added: ‘I now expect the Greek authorities to maintain their strong commitment to the economic adjustment programme and to rigorously and timely implement the policy package.

‘This second programme is the cornerstone of our efforts to boost sustainable growth and jobs in Greece; it is a unique opportunity not to miss. Furthermore, the success of this programme is a cornerstone of our comprehensive response to the current crisis.’

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