Greek FinMin: Debt buyback program 'must work'
Greek FinMin: Debt buyback program 'must work'
Greek Finance Minister Yannis Stournaras arrives for a news conference in Athens, on Wednesday, Nov. 28, 2012.Stournaras says a program whereby the country will buy back some of its bonds from private investors "must work" if the country's excessive debt load is to be reduced.The bond buyback is part of measures agreed on with European finance ministers earlier this week, including the release of Euro 44 billion ($57 billion) in critical rescue loans. (AP Photo/Petros Giannakouris)
ATHENS, Greece (AP) -- Greece's plan to back some of its bonds from private investors "must succeed" as it is a vital part of efforts to reduce the country's excessive debt, Finance Minister Yannis Stournaras said Wednesday.
The bond buyback is part of measures agreed on with European finance ministers in Brussels earlier this week, including the release of €44 billion ($57 billion) in critical rescue loans. The bulk of those funds are to be released by December 13, with more than €10 billion to go to internal financing.
Stournaras did not give details of the buyback scheme, which he said will be funded by about €13 billion-€14 billion in European funds. The funding will not come out of the €44 billion ($56 billion) worth of bailout loans which Greece's international creditors agreed to disburse by the end of March.
"The buyback must succeed, because it contributes significantly to reducing the debt," Stournaras said.
He stressed that bondholders would not be forced into the scheme.
"We have been asking for a buyback for months, it will happen, it will be voluntary and nobody will be forced to take part. Everybody can take part if they want to, I believe it is an opportunity, at the prices involved."
Greece's debt management agency is expected to give further details of the scheme early next week.
While stressing that the program must work, the minister also said there "is a Plan B," for which he would not give details.
Facing a mountain of debt and a gaping budget deficit, Greece's economy has been under close supervision since May 2010 by the International Monetary Fund and other eurozone countries, which have extended €240 billion in bailout funds to the country to prevent it from a messy default.
In March this this year, Greece carried out a bond swap under which it traded its bonds held by private investors for new ones with lower values and longer maturity dates. That deal wiped €110 billion off of the country's debt.
Private bondholders involved in that scheme included Greek pension and social security funds, who lost significant parts of their savings.
