January 22, 2012

Oh Dear, Greece Yet Again

Kiron Sarkar, writing for The Big Picture:

“Last week, reports from official sources and bondholders suggested that a deal had been agreed – the situation has changed over the weekend. Negotiators from the IIF (who represent the majority of the private bondholders) have left Athens.”

Greece has been jerking around the EU’s northern tier states, and the banks that hold Greek debt, for a couple of years. Citizens haven’t paid their taxes, the government hasn’t enforced its tax laws, and negotiators have strung along debt holders while the inevitable default draws closer.

Greek bondholders already suffered a 50% reduction in the value of their investment last year. They want greater interest in exchange for the elevated risk they take in rolling remaining Greek debt into new bonds. Who can blame them?

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