Europe awoke last night from a two-year debt nightmare that has held its economies hostage at a cost of hundreds of billions, and thousands of job losses.
The marathon crisis surrounding the looming collapse of Greece’s government — and likely undermining the continent’s euro currency — ended with just 11 days remaining before Athens tumbled into a domino default on its bloated $270 billion in government bonds.
A vast majority of debt holders — haplessly boxed into a corner and facing the loss of everything if Greece were to go bust — reluctantly agreed to accept about half of what they were owed, or around $140 billion. It greenlighted a rescue deal to give Greece a fresh start with less debt at a cheaper interest rate.
The complex bailout, the largest of its kind involving sovereign debt, took months of diplomacy and strong-arming to get bondholders and ministers alike on board the get-half-or-nothing bandwagon.
Officials said last night that about 85 percent of the debt holders had agreed to accept the deal, enabling Greek authorities to roll up the holdouts to complete the debt swap. Details were set to be disclosed today.
The swap deal unlocks about $171 billion in bailout cash already approved from the European Union and the International Monetary Fund.
However, it’s no guarantee of Greece’s solvency. Its debt equals 160 percent of its GDP, while the jobless rate is 21 percent, with 51 percent of people under 24 unemployed.
Officials said 32 private firms holding $111 billion in bonds accepted the swap as of last night, including banks in Germany, France, Greece and Cyprus. Reinsurance giant Munich Re holds $2.1 billion.
debt holders, sovereign debt
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