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Greece Debt Buyback Has Its Supporters

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Analysts welcomed talk Wednesday that Greece might reduce its debt load by buying back its own devalued bonds, even though a German government spokesman denied reports that such a plan was in the works.

Denials notwithstanding, economists said a buyback would make a lot of sense and could be an important step toward solving Europe’s sovereign debt crisis.

“This is an elegant solution,” said Jacques Cailloux, chief European economist at Royal Bank of Scotland. “It’s the first time we’ve got an indication Europe is starting to think outside of the box.”

Greek bonds already trade on open markets at a steep discount to their face value. If Greece bought back the bonds with help from other euro-zone countries, the country would not have to pay back the full amount of the debt when the bonds reach maturity.

“Ultimately it’s the return to some kind of stable debt path that will provide the biggest turnaround in confidence,” Mr. Cailloux said.

The latest speculation about a Greek restructuring was prompted by a report in the Die Zeit newspaper Wednesday, as well as statements by two ministers of the Greek government who said Tuesday that extending debt repayments would be a good idea.

The Greek government denied it was in talks with private creditors to restructure its debt, Bloomberg News reported.

A spokesman for Wolfgang Schäuble, the German finance minister, said “there is nothing to” the report in Die Zeit. “We’re not working on a restructuring of Greek debt,” said the spokesman, who was not authorized to be quoted by name.

Still, analysts remained convinced that European policymakers were indeed discussing ways to reduce Greece’s overall debt.

Denials like we had with the bailouts?

Although I have no idea how the Greeks will buy back the debt as they have no money, unless of course they are going to start printing Euro's like the Irish did?

It's not going to stabilise the market but is this in preparation for the Greeks to orderly exit the Euro holding all of their own debt?

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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