Prime Minister Loukas Papademos, in his first interview with a newspaper since taking on his new role as coalition government leader, told the New York Times that he is contemplating introducing legislation in parliament to force the country’s private creditors to participate in the Greek debt ‘haircut’.
It seems that negotiations over Private Sector Involvement (PSI) in cutting the privately held sovereign debt of the country by 50% have reached a stalemate, after a number of late-buyers of Greek bonds (mainly New York hedge funds), have refused to participate in PSI.
They expect either to be paid in full on maturity day for the debt paper that they hold, or to be refunded through the credit default swap market in the event of bankruptcy.
Papademos stated that if private debt holders do not fully participate in PSI, he will introduce legislation to force them to do so.
“This is contingent on the percentage” he told the prestigious American daily. Papademos also called on Greek politicians to pass much-needed economic measures in parliament, in accordance with the country’s official creditors’ demands.
(source: New York Times, Neurope)
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