WALL STREET JOURNAL: Euro-zone finance ministers early Tuesday agreed to an ambitious €130 billion ($172.1 billion) rescue deal that will see Greece’s private creditors take an even larger loss in order to put the debt-laden country on a sustainable footing and avert a catastrophic default.
The agreement revolves around a debt exchange that calls for private investors to waive 53.5% of their principal under a massive debt swap that will cut Greece’s outstanding debt stock by €107 billion. That goes beyond a 50% haircut agreed upon at a summit in October…
The deeper private sector haircut will help bring Greece’s debt as a proportion of gross domestic product to 120.5% by 2020 from over 164% currently… (more)
EDITOR: ‘Hope is eternal’ but we suspect they are just kicking the can down the road. Perhaps all parties would have been better served with a bankruptcy and exit of Greece from the Euro zone. Then the Greek economy would have been able to recover without being constrained by draconian austerity.
