Ready for a Haircut?  EU STARTED WORK ON BRADY PLAN FOR GREECE

 

The Financial Times thinks this story from To Vimain Greece is true. It contains a lot detail about discussions currently under way for a future Greek debt restructuring. The paper says that the EU, IMF and the ECB have reached basic agreement that a debt restructuring for Greece is inevitable, with the following concrete options being discussed. 1. A haircut of 35%. Technically, this will be an exchange of existing bonds with bonds of 65% of their value. 2. A bond swap to 30-year bonds with low interest rates. 3. A new loan package of 25% of the previous volume. The paper recalls the Brady plan, under which the US organised a similar debt swap for Latin American debt, with the help of a Fed guarantee. The paper also quotes Greek sources as confirming that they no longer expect the rebound of growth to happen immediately.

EU ready to stretch Greek and Irish loans to 30 years

Paul Taylor of Reuters has the story that EU officials are considering an extension of the emergency loans from 3 years in the case of Greece and 7 years of Ireland to 30 years, hoping to draw a line under the debt crisis. He quotes sources saying that Axel Weber had made such a suggestion, and it was part of a discussion among EU finance ministers. (So there is plenty of action. Officials are finally doing all those things that they swore they would never do not too long ago. )