Thursday, 21 July 2011

Greece To Default

Details are beginning to emerge from the Franco-German agreement, though they remain piecemeal measures rather than an overall coherent strategy. The key measure so far is Greece will be allowed to partially default by effectively extending the maturity of existing bonds:
The deal paves the way for a German-backed initiative for more direct measures to get private holders of Greek bonds to help pay for the bail-out. According to a version of the plan circulated by the European Commission on Wednesday evening, all owners of Greek bonds that come due in the next eight years will be urged to swap their holdings for new bonds that do not mature for another 30 years.
The FTSE slides on the Greece partial default by 48 points.

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