Markets
Eurozone ministers meet to resolve Greek debt crisis
Joe McGrath, 11 July 2011
Eurozone finance ministers are to reconsider proposals for a bond buyback scheme today as the leaders try to reach a resolution for Greek debt holders.
The meeting will aim to reach an agreement after ratings agencies stressed that any ‘selective default’ or ‘restructuring’ of the country’s debt would still be classified as a default.
On Friday, a mass sale of Italian bonds, triggered fears that Italy – which has the highest sovereign debt ratio to GDP – could be the next of the PIIGS countries to be affected.
If Italy were to fall, it would leave the Eurozone’s rescue mechanism – EFSF – with insufficient funds for a further assistance.
Last month, Standard & Poor’s cut Greece’s long-term credit rating to CCC, with a warning it could still yet cut further to SD (selective default).
The news of today’s reassessment of the situation follows reports that the French proposals - to offer banks incentives to hold Greek debt and roll over their maturing investments – have been binned.
Two weeks ago, Barclays Capital released an estimate of the 40 top holders of Greek government bonds and Greek debt by organisation, published in The Economist.
In the UK, Royal Bank of Scotland and HSBC made the top 40 list, with holdings of €1.1 billion and €0.8 billion respectively.
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