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Investors face 70% loss in Greek deal
Posted By -NO AUTHOR- On 01/31/2012 @ 1:07 pm In Front Page,World | No Comments
BRUSSELS (AP) – Investors participating in a deal to slash Greece’s massive debt would face an overall loss on their bond holdings of more than 70 percent, a person involved in with the negotiations said early Tuesday.
European leaders at a summit in Brussels said a final debt deal could be signed off in the coming days, together with a second multibillion-euro bailout package designed to save the country from a potentially disastrous bankruptcy.
Athens and representatives of investors holding Greek government bonds over the weekend came close to a final agreement designed to bring Greece’s debt down to a more manageable level. Without a restructuring, those debts would swell to around double the country’s economic output by the end of the year.
If the agreement works as planned, it will help Greece remain solvent and help Europe avoid a blow to its already weakened financial system, even though banks and other bond investors will have to accept big losses.
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