Reuters: European plan for a new Greek debt restructuring

Reuters: European plan for a new Greek debt restructuring

European policymakers are working on "last chance" options to bring Greece's debts down and keep it in the Eurozone...

European policymakers are working on "last chance" options to bring Greece's debts down and keep it in the Eurozone, with the ECB and national central banks looking at taking significant losses on the value of their bond holdings, officials said.


The latest aim is to reduce Greece's debts by a further 70-100 billion euros, several senior Eurozone officials familiar with the discussions told Reuters, cutting its debts to a more manageable 100 percent of the annual economic output.

This would require the European Central Bank and national central banks to take losses in their holdings of Greek government bonds, and could also involve national governments accepting losses.

The favored option is for the ECB and national central banks to carry the cost, but that could mean that some banks and the ECB itself would have to be recapitalized, the officials said.

The ECB declined comment on Friday.


Officials described a further restructuring of the Greek debt as a last chance to restore the country to solvency, with the agreed goal of cutting its debt to 120 percent of the GDP by 2020 already seen as far beyond reach.

The International Monetary Fund, party to the two rescue packages Greece has so far received, is in favor of overhauling Athens's official-sector loans - a process policymakers refer to as "OSI" or official sector involvement.

"If I were to assign a percentage chance to OSI in Greece happening, I would say 70 percent," one euro zone official involved in the deliberations told Reuters.
30% Option


Total outstanding official sector credit to Greece, which also includes bilateral loans extended to Greece by Eurozone governments, is about 220-230 billion euros.




But OSI was deemed too politically sensitive at the time and was pushed to the background. One official described that as a missed opportunity and suggested it should not be repeated.

Central Bank Recaps

Politically it may be easier for policymakers to get the ECB and national central banks to take a hit on their bond holdings rather than Eurozone governments, which would mean that taxpayers would suffer direct losses.



"The preference is that the OSI happen in the ECB books," one of the sources said. "The ECB would have to be recapitalized as a result, but that would be politically much more acceptable than a loss for taxpayers."




Ακολουθήστε το στο Google News και μάθετε πρώτοι όλες τις ειδήσεις

Δείτε όλες τις τελευταίες Ειδήσεις από την Ελλάδα και τον Κόσμο, τη στιγμή που συμβαίνουν, στο

Ρoή Ειδήσεων

Ειδήσεις Δημοφιλή Σχολιασμένα

Δείτε Επίσης