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Greece: Voluntary bank help would be a default
Originally posted by 5corpio
The Fitch credit ratings agency has said that if commercial lenders roll over their loans to Greece, it will deem the country to be "in default".
As Greece awaits further bail-out money from the EU and International Monetary Fund, private investors are under pressure to extend their loans. Last week, France and Germany reached a compromise over whether such investors should assume a greater burden, saying any such move should be "voluntary".
But few think their help is by choice.
Fitch's comments came as the Greek government was due to face a vote of confidence: a crucial step towards gaining another 12bn euro ($17bn; £10bn) loan from the EU and the IMF.
If the government survives the vote, Greece's parliament will be asked to back the latest spending cuts, which are worth 28bn euros, on 28 June.
Spending cut-backs have already hit benefits, public sector salaries and pensions, sparking protests across the country.
That will not be enough to keep the country going, and another giant support package is being pondered, possibly worth an even greater sum than the original 112bn euros.
'Junk' fears
This time, commercial lenders such as banks, insurance companies and pension funds are being asked to contribute by voluntarily rolling over their existing loans.
"Voluntary" help by commercial lenders would mean a loan is paid back on time, but the same amount is immediately lent out again on the same terms.
In the case of Greece, this effectively means lending on easier terms because, given the current state of the Greek economy, lenders would not be expected to offer the same terms as they did a few....LINK: BBC News - Greece: Voluntary bank help would be a default
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As Greece awaits further bail-out money from the EU and International Monetary Fund, private investors are under pressure to extend their loans. Last week, France and Germany reached a compromise over whether such investors should assume a greater burden, saying any such move should be "voluntary".
But few think their help is by choice.
Fitch's comments came as the Greek government was due to face a vote of confidence: a crucial step towards gaining another 12bn euro ($17bn; £10bn) loan from the EU and the IMF.
If the government survives the vote, Greece's parliament will be asked to back the latest spending cuts, which are worth 28bn euros, on 28 June.
Spending cut-backs have already hit benefits, public sector salaries and pensions, sparking protests across the country.
That will not be enough to keep the country going, and another giant support package is being pondered, possibly worth an even greater sum than the original 112bn euros.
'Junk' fears
This time, commercial lenders such as banks, insurance companies and pension funds are being asked to contribute by voluntarily rolling over their existing loans.
"Voluntary" help by commercial lenders would mean a loan is paid back on time, but the same amount is immediately lent out again on the same terms.
In the case of Greece, this effectively means lending on easier terms because, given the current state of the Greek economy, lenders would not be expected to offer the same terms as they did a few....LINK: BBC News - Greece: Voluntary bank help would be a default
Previous news on Forum: LINK: allaboutFORUMS - View Single Post - Latest Headline News (Media)