392:. According to Forbes magazine Greece's restructuring represents a default. It is the world's biggest debt restructuring deal, affecting some €206bn of bonds. The creditors are invited to swap their current Greek bonds into new bonds with a maturity of between 11 and 30 years and lower average yields of 3.65% (2% for the first three years, 3% for the next five years, and 4.2% thereafter), thus facilitating a €100bn debt reduction for Greece. Euro-area Member States have pledged to contribute €30bn for private sector participation. In case not enough bondholders agree to a voluntary bond swap, the Greek government threatened to and did introduce a retroactive
268:
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debt reduction for Greece. The second requirement was that Greece needed to implement another demanding austerity package in order to bring its budget deficit into sustainable territory. The third and final requirement was that a majority of the Greek politicians should sign an agreement guaranteeing their continued support for the new austerity package, even after the elections in April 2012.
319:, who was to lead a new transitional government. The most important task of this interim government was to finalize the "haircut deal" for Greek governmental bonds and pass a new austerity package, to comply with the Troika requirements for receiving the second bailout loan worth €130bn (enhanced from the previously offered amount at €109bn).
400:
liberalise the country's closed professions, tightening rules against bribery and readying at least two large state-controlled companies for sale by June. In return for the bailout money Greece accepts "an enhanced and permanent presence on the ground" of
European monitors. It will also have to service its debts from a special, separate
399:
The cash will be handed over after it is clear that private-sector bondholders do indeed join in the haircut, and after Greece gives evidence of the legal framework that it will put in place to implement dozens of "prior actions" - from sacking underproductive tax collectors to passing legislation to
376:
enhancement in case the Greek growth meets certain conditions. While the market price of the portfolio proposed in the exchange is of the order of 21% of the original face value (15% for the two EFSF PSI notes – 1 and 2 years – and 6% for the New Greek Bonds – 11 to 30 years), the duration of the set
338:
behind the second bailout package defined three requirements for Greece to comply with in order to receive the money. The first requirement was to finalize an agreement whereby all private holders of governmental bonds would accept a 50% haircut with yields reduced to 3.5%, thus facilitating a €100bn
303:
Furthermore, the Euro countries agreed on a plan to cut the debt of Greece from today's 160% to 120% of GDP by 2020. As part of that plan, it was proposed that all owners of Greek governmental bonds should "voluntarily" accept a 50% haircut of their bonds (resulting in a debt reduction worth €100bn),
299:
from €500bn to €1 trillion, as a firewall to protect financial stability in other
Eurozone countries with a looming debt crisis. The leverage had previously been criticized from many sides, because it is something taxpayers ultimately risk to pay for, because of the significantly increased risks
256:. It was agreed that the net contribution of banks and insurance companies to support Greece would include an additional €37bn in 2014. The planned purchase of Greek bonds from private creditors by the euro rescue fund at their face value will burden the private sector with at least another €12.6bn.
431:
When the swap is executed, the bond holders will receive a cash payment on 15% of their original holding, and become issued with new Greek bonds worth 31.5% of their old bonds (covered by 24 new securities). Combined this will result in a 53.5% haircut of the face value, so that the Greek debt pile
326:, then likened the austerity pressure Greece was feeling to the attitude the US exercised over Germany in 1931. In that earlier circumstance, the collapse of an Austrian and then a German bank followed, leading to a worsening of the Great Depression, political change and ultimately war.
304:
and moreover accept interest rates being reduced to only 3.5%. At the time of the summit, this was at first formally accepted by the government banks in Europe. The task to negotiate a final deal, also including the private creditors, was handed over to the Greek politicians.
367:
of Greek governmental bonds, the equivalent to an overall loss of around 75%. The deal implied that previous Greek bond holders are being given, for €1000 of previous notional, €150 in "PSI payment notes" issued by the EFSF and €315 in "New Greek Bonds" issued by the
415:
said twelve of its steering committee would swap their bonds and accept a loss of up to 75%. When all acceptances had been counted at March 9, and after the Greek parliament subsequently had decided to activate a collective action clause for the bonds covered by
696:
The analysis was revisited in July 2012, when another commentator saw the situation as yet worse and
Germany's pro-austerity stance as hardened, yet more damaging and bringing the risk of a bank-default-trigger, for example, yet
346:
finalized the second bailout package. In a thirteen-hour marathon meeting in
Brussels, EU Member States agreed to a new €100 billion loan and a retroactive lowering of the bailout interest rates to a level of just 150
359:
was to provide "a significant contribution" to that loan but was only to decide in the second week of March how much that will be. EU Member States would also pass on to Greece all profits which their
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on the decisions of the Euro summit. After two days of intense pressure, particularly from
Germany and France, he finally gave up on the idea. On 11 November 2011 he was succeeded as prime minister by
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On 21 July 2011, 17 leaders of Euro countries, meeting at an EU summit, approved a preliminary draft of a second bailout package for Greece to address the limitations of the
259:
It was also announced at the EU summit, a reconstruction plan for Greece in order to promote economic growth. The
European Commission established a "Task Force for Greece".
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For the first time, this also included a
Private Sector Involvement (called a PSI), meaning that the private financial sector accepted a "voluntary"
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291:, to make them strong enough to withstand those financial losses that potentially could erupt from a Greek default. The second decision was to
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account, depositing sums in advance to meet payments that fall due in the following three months. This operation will be supervised by the
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In view of the uncertainty of the domestic political development in Greece, the first disbursement was suspended after Prime
Minister
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On the night of 26 to 27 October at the EU summit, the politicians made two important decisions to reduce the risk of a possible
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made by buying Greek bonds at a debased rate until 2020. Private investors accepted a slightly bigger haircut of 53.5% of the
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1121:"Ratification of the Act of Legislative Content "Approval of the Draft Master Financial Assistance Facility Agreement"
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deal with its private sector involvement (PSI) a "Restructuring Credit Event" which will trigger payment of
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681:
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245:. The second bailout package would take the form of an €110bn aid package provided by the newly created
214:
249:. The repayment period was extended from seven to 15 years and the interest rate was lowered to 3.5%.
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287:, in the case of a Greek default. The first decision was to require all European banks to achieve 9%
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424:). The remaining 4.3% of bond holders covered by foreign law and refusing the debt swap (equal to
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420:, the overall share of Greek government bonds to face a debt swap had reached 95.7% (equal to
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816:"Greek Debt Default: Investors' and Risk Managers' Perspective Riskdata study Mar 28, 2012"
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428:), were given two weeks of extra time to reconsider and voluntarily join the swap.
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The second bailout package expired on 30 June 2015. It was superseded by the
609:
Erklärung des EU-Kommissionspräsidenten José Manuel
Barroso zum Sondergipfel
343:
210:
637:
571:
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372:, including a "GDP-linked security". The latter represents a marginal
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on the Second Economic Adjustment Programme for Greece (March 2012)
1066:"Hellenic Republic - Ministry of Finance - Press release (9 March)"
1166:
718:
266:
660:"Zustimmung zum Rettungsschirm: Was der Bundestag Merkel erlaubt"
581:
356:
791:"Europe Agrees on New Bailout to Help Greece Avoid Default"
759:
757:
949:. Brussels: Rat der Europäischen Union. 26 October 2011
545:
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311:
announced on 1 November 2011 that he wanted to hold a
520:
Syriza Wave: Surging and Crashing with the Greek Left
1262:
Economic adjustment programmes of the European Union
447:(MFFA) between the EFSF, the Hellenic Republic, the
1155:
The Second Economic Adjustment Programme for Greece
682:"In today's debt crisis, Germany is the US of 1931"
1189:: CS1 maint: DOI inactive as of September 2024 (
701:"Euro crisis brings world to brink of depression"
432:overall will decrease from its current level at
886:"Insight: How the Greek debt puzzle was solved"
382:International Swaps and Derivatives Association
377:of New Greek Bonds is slightly below 10 years.
273:presidency of the Council of the European Union
172:Second Economic Adjustment Programme for Greece
990:"Das Rettungspaket kommt, die Zweifel bleiben"
918:"Greece bailout: six key elements of the deal"
911:
909:
907:
633:"Das Risiko des EFSF wird jetzt vervielfacht!"
501:Third Economic Adjustment Programme for Greece
479:First Economic Adjustment Programme for Greece
445:Master Financial Assistance Facility Agreement
226:Third Economic Adjustment Programme for Greece
1038:"Bondholders agree to restructure Greek debt"
151:
8:
587:Das zweite Griechenland-Hilfspaket im Detail
486:Economic Adjustment Programme for Portugal
205:on one hand, and on the other hand by the
158:
144:
29:
27:Bailout package for Greece, signed in 2012
1211:on the website of the European Commission
1193:) CS1 maint: location missing publisher (
662:. Financial Times Deutschland. 2011-10-25
496:Economic Adjustment Programme for Ireland
322:One of the German EFSF-leverage critics,
833:Fontevecchia, Agustino (11 March 2012).
491:Economic Adjustment Programme for Cyprus
511:
384:(ISDA) issued a communiqué calling the
32:
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1095:"Greek debt swap support close to 95%"
971:
960:
116:Greek government debt crisis articles:
555:Wie Griechenland gerettet werden soll
436:, to a more sustainable level around
247:European Financial Stability Facility
197:It was signed on 1 March 2012 by the
7:
789:Castle, Stephen (20 February 2012).
699:Delamaide, Darrell (July 24, 2012).
680:Lindner, Fabian (24 November 2011).
48:Tax evasion and corruption in Greece
631:Lindner, Fabian (26 October 2011).
916:Pratley, Nils (21 February 2012).
413:Institute of International Finance
25:
449:Hellenic Financial Stability Fund
992:. Sueddeutsche. 21 February 2012
80:2011 proposed economy referendum
1161:. Occasional Papers. Brussels.
1012:"Greek race to unlock bail-out"
860:"Greece Swap Insurance Default"
330:Final agreement (February 2012)
283:to other institutions, notably
186:on financial assistance to the
18:Second bailout package (Greece)
1209:Financial assistance to Greece
770:. Euro Group. 21 February 2012
1:
174:, usually referred to as the
105:2015 Greek bailout referendum
53:Financial crisis of 2007–2008
1232:Greek government-debt crisis
736:"Q&A: Greek debt crisis"
474:Greek crisis countermeasures
469:Greek government-debt crisis
192:Greek government-debt crisis
132:Greek crisis countermeasures
1216:Memorandum of Understanding
263:EU summit (26 October 2011)
243:First Greek bailout package
219:International Monetary Fund
184:memorandum of understanding
63:Financial audits, 2009–2010
1278:
717:The Lindner November 2011
613:. Ec.europa.eu. 2010-07-29
396:to enforce participation.
201:under then-prime minister
190:in order to cope with the
1214:Original document of the
593:January 13, 2012, at the
536:Zum Abschluss ein Lächeln
342:On 21 February 2012, the
394:collective action clause
1169:(inactive 2024-09-19).
944:"Euro Summit Statement"
237:Early draft (July 2011)
110:September 2015 election
68:Anti-austerity movement
1257:2014 in Greek politics
1252:2013 in Greek politics
1247:2012 in Greek politics
1242:2011 in Greek politics
970:Cite journal requires
443:On 20 March 2012, the
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176:second bailout package
765:"Eurogroup statement"
411:On 3 March 2012, The
300:assumed by the EFSF.
270:
215:European Central Bank
127:Greek crisis timeline
100:January 2015 election
455:was ratified by the
390:credit default swaps
380:On 9 March 2012 the
90:Government formation
58:European debt crisis
1150:European Commission
1125:Hellenic Parliament
1073:Ministry of Finance
864:Wall Street Journal
532:SĂĽddeutsche Zeitung
522:, NYU Press, p. 15.
457:Hellenic Parliament
207:European Commission
122:Greek eurozone exit
1018:. 21 February 2012
892:. 29 February 2012
386:debt restructuring
277:
95:June 2012 election
74:Election articles:
1176:978-92-79-22849-0
742:. 9 February 2012
584:, 22. Juli 2011:
552:, 22. Juli 2011:
534:, 21. Juli 2011:
370:Hellenic Republic
309:George Papandreou
254:haircut (finance)
209:on behalf of the
188:Hellenic Republic
180:second memorandum
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85:May 2012 election
34:Greek debt crisis
16:(Redirected from
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1043:The Sun News
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721:also ran in
710:. Retrieved
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686:The Guardian
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638:blog.zeit.de
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1131:21 February
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996:21 February
928:21 February
896:29 February
774:21 February
746:11 February
706:MarketWatch
644:11 November
1226:Categories
1143:Literature
953:28 October
712:2012-07-24
691:2012-07-24
666:2011-10-28
617:2012-05-17
507:References
426:€9 billion
365:face value
351:above the
313:referendum
1185:cite book
418:Greek law
344:Eurogroup
281:contagion
211:Eurogroup
924:. London
922:Guardian
740:BBC News
723:Der Zeit
591:Archived
463:See also
293:leverage
1105:8 March
1079:9 March
1050:6 March
890:Reuters
870:9 March
844:9 March
800:1 March
697:closer.
353:Euribor
271:Polish
232:History
221:(IMF).
182:, is a
178:or the
1173:
839:Forbes
582:zdf.de
438:€250bn
434:€350bn
422:€197bn
406:Troika
402:escrow
374:coupon
355:. The
336:Troika
285:Cyprus
275:, 2011
213:, the
1159:(PDF)
1069:(PDF)
947:(PDF)
768:(PDF)
719:op-ed
1195:link
1191:link
1171:ISBN
1133:2015
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976:help
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295:the
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