dimanche 29 mars 2015
Greek Markets Show All at Risk Should Mistake Trigger a Default
Posted on 21:36 by nice news
In Athens, the unspeakable is at risk of becoming the inevitable.
Market metrics show Greece is in danger of sinking under the burden of its debt, putting repayments of about 500 billion euros ($546 billion) owed to European taxpayers, rescue funds, banks and bondholders in jeopardy.
Prime Minister Alexis Tsipras is locked in talks with creditors over measures attached to Greece’s bailout loans and a government official said on Friday the country won’t service its debt if creditors don’t release the funds. The government has also floated a restructuring that would link some future payments to economic growth, reduce interest rates and allow more time for repayments. While their intention is to exclude private bondholders, the danger is that talks collapse and Greece leaves the euro, leaving all parties facing losses.
“The biggest fear now is that Greece exits by mistake,” said Padhraic Garvey, global head of rates strategy at ING Groep NV in London. “The only feasible solution in the absolute extreme would be to turn all the official debt into a perpetual bond so it never gets repaid.”
With the country running out of cash, credit-default swaps indicate a 72 percent chance of Greece reneging on its debt within five years compared with 67 percent at the start of the month, according to CMA.
Inverted Curve
Market metrics show Greece is in danger of sinking under the burden of its debt, putting repayments of about 500 billion euros ($546 billion) owed to European taxpayers, rescue funds, banks and bondholders in jeopardy.
Prime Minister Alexis Tsipras is locked in talks with creditors over measures attached to Greece’s bailout loans and a government official said on Friday the country won’t service its debt if creditors don’t release the funds. The government has also floated a restructuring that would link some future payments to economic growth, reduce interest rates and allow more time for repayments. While their intention is to exclude private bondholders, the danger is that talks collapse and Greece leaves the euro, leaving all parties facing losses.
“The biggest fear now is that Greece exits by mistake,” said Padhraic Garvey, global head of rates strategy at ING Groep NV in London. “The only feasible solution in the absolute extreme would be to turn all the official debt into a perpetual bond so it never gets repaid.”
With the country running out of cash, credit-default swaps indicate a 72 percent chance of Greece reneging on its debt within five years compared with 67 percent at the start of the month, according to CMA.
Inverted Curve
Greek Markets Show All at Risk Should Mistake Trigger a Default
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