Wall Street Journal
September 16, 2011
The bank industry group negotiating Greece's debt refinancing is asking the International Monetary Fund and major emerging markets to back a private-sector led plan for Athens to buy back €20 billion ($27.75 billion) of its debt.
The Institute for International Finance, which a represents 440 of the world's largest banks, insurance companies and investment firms, said its proposal would double the previously planned €20 billion bond buyback program, stabilize markets and contain contagion into other euro-zone economies.
The idea is for countries such as Brazil, China and India to pool their resources into a new account held by the IMF that would then be loaned to the Greek government to purchase debt from private holders.
The IIF estimates the additional financing, combined with the existing debt exchange, debt rollover and debt buyback program, could lower Greece's debt burden by up to €25 billion, or 11% of gross domestic product. That would drop its debt-to-GDP ratio to at least 91% by 2020, possibly up to 82% in a good growth environment.
To maximize the benefits, the proposed debt buyback scheme would be organized by the Greek government and coincide with the private sector debt swap program tentatively scheduled for early to mid-October.
More
No comments:
Post a Comment