The final deadline for banks and hedge funds to swap their Greek debts and seal a €130 billion (£109 billion) rescue for Europe’s chief struggler loomed large today amid rising optimism over support for the deal.
Investors have until 8pm to sign up to the swap, which will slash Greece’s €206 billion in privately held debt by half. If the swap fails to garner sufficient support, the bailout will fall apart and the crisis-hit country will default on its debts in less than two weeks when a €14.4 billion bond repayment falls due.
Greek officials said the swap was “going well”, although analysts reckon Greece will fail to drum up the 90% level of support needed to push through the swap on a voluntary basis. With support above 75%, Athens is likely to press the remainder to take part through so-called “collective action clauses”. This is likely to trigger billions in payments to those who have bet on a Greek default by buying credit default swaps.
The deadline loomed as Greece’s politicians faced another broadside from Germany over its failure to slash costs and boost private investment in return for the billions pumped in to rescue the Greek economy.
Economy minister Philipp Rösler told a German newspaper: “The aid has hardly been accepted. A lot has been in vain so far. It is very disillusioning.”
