Thursday, May 19, 2011

ECB Issues Threat Over Greece: Do Not Restructure or Else; Instead, Take In More Debt Please!

The ECB has said that it would refuse to accept Greek bonds as collateral in the event of a restructuring of Greek debt.
Instead, Euro zone governments were considering a new plan to prevent a Greek default. According to this plan,  private investors would be asked to keep their exposure to its debt, and Greece would actualy receive a new package of EU/IMF aid! I.e, more debt for Greece.
The threat was made by Juergen Stark, ECB Executive Board member. Any soft or hard restructuring that might trigger a "credit event" -- or the payout of default insurance contracts -- was off the table.

So Greece, take in more debt.

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