12 Major Bond Holders Agree To Cut Greek Debt
By VOA
Greece’s largest private creditors say they will eliminate more than half the debt the country owes them to help it avoid a default later this month.
The banks, insurers and investment funds said Monday they would participate in the plan to cut $142 billion in Greek debt, although it was not immediately clear what share of that amount the 12 institutions would cover. With Greece planning to repay its remaining debt to the creditors over an extended period, the financial companies will lose about three-quarters of their original investments on the Greek bonds.
Some of Europe’s best known financial services firms are among the creditors agreeing to assist Greece. They include Germany’s Deutsche Bank and Commerzbank and the insurer Allianz, the French bank BNP Paribas, and Greece’s Eurobank EFG and the National Bank of Greece.
Greece has set Thursday as the deadline for its private creditors to accept the debt write-down. The dozen institutions that agreed to cut the Greek debt were part of the Washington-based Institute of International Finance that negotiated the pact last month.
It is not clear how many other Greek creditors will join them. Greece says that if not enough of its lenders voluntarily cut the country’s debt, it will seek to impose the losses on them.
The debt write-down is part of Greece’s effort to secure a new $172-billion international bailout, the country’s second in two years. The country’s parliament has also adopted a variety of austerity measures, over the staunch opposition of the Greek populace, to cut wages and pensions and eliminate thousands of government jobs.
Finance Minister Evangelos Venizelos underscored the fragile nature of the Greek economy, disclosing that bank deposits in the country have dropped more than $92 billion since the start of the country’s debt crisis in 2009.
He said that about $21 billion of the funds have been sent to accounts in other countries, mostly Britain. Venizelos said the rest has been kept by Greeks “in mattresses or in boxes,” or spent to meet living expenses. The country is in its fifth year of recession.
