The Greek government spokesman Pantelis Kapsis stated that the Prime Minister was to meet with Institute of International Finance (IIF) director Charles Dallara yesterday to resume negotiations on the ‘haircut’ of Greek state bonds held by private investors (hedge funds and international private banks).
Of the estimated 260 billion euros worth of Greek bonds, about half are owned by banks and hedge funds and the European Union and the IMF demand a 70 per cent ‘haircut’ of their value so that the Greek debt becomes ‘viable’.
In compensation to the private banks, the Greek government is to issue new bonds to replace the current ones; these new state bonds will be due in 20-30 years. The main disagreement between the EU-IMF and the IIF is the interest rate of the new Greek state bonds.
A four per cent interest rate agreed 10 days ago between the Greek government and the IMF was rejected by the EU-IMF who demand a 3.5 per cent interest rate.
On top of this is the issue of the Greek state bonds held by the European Central Bank (ECB) and other eurozone countries’ state banks, estimated at about 100bn euros. The IIF demanded that these bonds too get a ‘haircut’ and this is now supported by the IMF director Christine Legarde on the pretext of ‘balance’ between private and state banks.
Both the EU and the IMF have stated that they won’t proceed with yet another loan of 130bn euros to Greece unless an agreement is reached with the IIF. If there is no deal Greece will declare an ‘orderly’ or ‘disorderly’ bankruptcy in March when some 15bn euros are due to be paid to creditors.
The EU-IMF-ECB team, the so-called ‘troika’ in Athens for over a week now, are demanding huge wage cuts in workers’ wages and the total abolition of the national collective labour agreements.
The determination to fight of the Greek working class is expressed in the now three-months-old strikes in a steel plant and in the media.
Parliamentary deputies are attacked by furious workers in restaurants and in the streets. But the GSEE (Greek TUC) refuses to call even a demonstration let alone to declare an indefinite general strike as demanded by striking workers.