Greek Bond Talks Edge Toward 68% Haircut Deal; Will the Deal Be Accepted?Greek Bond Talks Edge Toward 68% Haircut Deal; Will the Deal Be Accepted?

MISH'S
Global Economic
Trend Analysis

Former ECB president Jean Claude Trichet said there would be no haircuts. There were. The first Greek haircut was 21% and it was insufficient. The second Greek haircut deal was 50% and that too was insufficient. On each failed attempt, the ECB and EMU poured more money into Greece.

There is now about €200bn of Greek debt held by banks, hedge funds and other investors up from about €50bn a couple years ago.

A third renegotiation is now underway, rumored to be a 68% haircut. Clearly there would have been far fewer ramification on banks if Greece would have defaulted long ago.

Such is the stubborn arrogance of ECB, and EMU officials.

Unless another haircut is approved Greece, and still more money is poured into Greece, it will default on March 20 when a €14.5 billion bond repayment is due.