Wall Street Journal
March 7, 2012
Greece is unlikely to get all of its bondholders to agree willingly to a debt-restructuring plan before a Thursday deadline, but it repeated Tuesday that it is ready to force the deal through by other means.
Greece stepped up pressure on its creditors Tuesday, saying it won't have money available to pay bondholders who resist. Creditors have until Thursday evening to decide whether they will accept the deal, which replaces existing bonds with a package of new securities with less than half of the face value.
But what happens Thursday is part of a carefully choreographed dance designed to ensure the deal is executed. The country has made plain that the bulk of its bondholders—those who have €177 billion ($234 billion) of debt issued under Greek legislation—almost certainly will be compelled to submit to the deal whether or not they agree, thanks to changes in Greek law introduced last month.
The verbal jousting on Tuesday appeared primarily to be aimed at the small minority of bondholders whose securities were issued under non-Greek law, where Greece's reach is more limited. They have €21 billion in debt, counting a small quantity of bonds issued by state-owned companies and guaranteed by Greece.
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