Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Greece Secures Biggest Debt Cut in History

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Greece Secures Biggest Debt Cut in History

Article excerpt

ATHENS, Greece --

Greece has cleared a major hurdle in its race to avoid bankruptcy by persuading the vast majority of its private creditors to sign up to the biggest national debt writedown in history, paving the way for a second massive bailout.

Following weeks of intense discussions, the Greek government said today that 83.5 percent of private investors holding its government bonds were participating in a bond swap. Of the investors holding the (euro) 177 billion ($234 billion) in bonds governed by Greek law, 85.8 percent joined.

"We have achieved an exceptional success ... and I believe everyone will soon realize that this is the only way to keep the country on its feet and give it a second historic chance that it needs," Finance Minister Evangelos Venizelos told Parliament.

He said he would recommend the activation of legislation known as "collective action clauses" to force bondholders who refused to sign up into the swap. The issue was to be discussed at a Cabinet meeting later this afternoon.

"A window of opportunity is opening" with the success of the deal to reduce the country's (euro) 368 billion debt by (euro) 105 billion, or about 50 percentage points of gross domestic product, he said. …

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