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It doesn't seem like Tsipras is trying to get debt forgiveness paid for by the Germans, though. He wants to use the threat of default to force Greek's creditors
by cwyers 12y ago
It doesn't seem like Tsipras is trying to get debt forgiveness paid for by the Germans, though. He wants to use the threat of default to force Greek's creditors to give them a haircut -- reduce principal or interest or both. That will reduce the amount of Greek debt repayment but it wouldn't increase the ability of Greece to incur more debtedness.
- dandare 12y agoAre you sure? I thought the private creditors were already "haircutted", most of the Greek debts is to EU states and IMF.
- cwyers 12y agoI will preface this by saying that I am totally not sure, but my impression was that the EU and IMF loans were to enable Greece to repay creditors in full or close to.
- bibabo 12y agoGreece got a debt cut around 140B already.
- imarg 12y agoWell sort of. Because after the haircut Greece owed more money than before.
- antman 12y agoHere is how the trick worked: Private creditors were haircutted and the CDS (credit default swaps) were activated for the largerst organizations that could afford having them in the first place. Smaller creditors were stiffed. Foreign Goverment entities were exempt and foreign institutions (pension funds etc) could buy at 30-40% percent the defaulted bonds. Said foreign Governments had ofcourse the inside information that they would give the Greeks the money to repay in full price their debt. That was hidden from the other investors during the start of the program.