The Greeks Get Their Bailout, Finally

Greece now have all of the players for its bailout in place. The IMF and EU agreed that austerity is in place enough that it will lower deficits, and, at some point in the distant future, the national debt. The ECB has given support as it pushes money into the banking system, some of which is presumably used to buy sovereign debt of some of the region’s financially weakest nations. The last brick in the bridge was an exchange by private investors of old Greek bonds for new ones. There has been resistance because the value of the new paper is about 30% of the old. The private holders have tried to hold out for better terms. Circumstances have convinced almost all of them that an “unorderly default” would make their investments worth nothing. At this point over 95% of these private holders have agreed to the new terms.