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Greek haircut of 50-60 percent

Monday, October 24, 2011 - 01:33

Oct.24 - German Chancellor Angela Merkel puts the size of a writedown of Greek debt between 50 and 60 percent according to a Green Party politician. Basmah Fahim reports

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Writedown fears are weighing on Greece as the country's bank shares tumbled, some sliding more than 13 percent. There are already fears that a deeper mark-down on Greek government bonds, held by the private sector, would force lenders to seek state support to recapitalise. Now those fears could soon become a reality. According to Germany's Green Party Leader Juergen Trittin, Chancellor Angela Merkel has put a size on the haircut. (SOUNDBITE) (German) OPPOSITION GREEN PARTY FLOOR LEADER, JUERGEN TRITTIN, SAYING: "Above 50 and below 60" Private investors have already offered to accept a loss of 21 per cent but Greek debt is now so high that's not nearly enough. Analysts say Greek banks will bear the brunt of the far heftier haircut. (SOUNDBITE)(Greek) MERIT SECURITIES ANALYST NIKOS CHRISTODOULOU, SAYING: ''The biggest disadvantage would be for Greek banks, who cannot stand such a large haircut. Funds will be required from the state, there is a large possibility they will be nationalized, some completely while others less." Greeks are also looking to European policy makers to fix the country's crippling debt crisis. (SOUNDBITE) (Greek) FOTIS, PRIVATE SECTOR WORKER, SAYING: "Of course they owe it to us to help us, because if there was ever a problem in Greece, the EU would be responsible for it." European leaders will join forces again on Wednesday to decide how to restructure Greece's debt in order to reform the single currency. The Greeks have already had several close shaves, now it's a case of restoring not only their confidence but that of the global markets too. Basmah Fahim, Reuters

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Greek haircut of 50-60 percent

Monday, October 24, 2011 - 01:33