Il result of the swap Greek is enough. According to finance ministers of the Eurozone "the necessary conditions are there" to "launch the national procedures" which will lead to the final approval of the second 130 billion euro aid plan in favor of the Greek country. This is what we read in a statement released by the president of the Eurogroup, Jean-Claude Juncker, at the end of the teleconference meeting which took place in the early afternoon. The official decision should come early next week.
However, the Eurogroup "urgently asks the Greek authorities - continues the press release - to continue to demonstrate a strong commitment" in the "rigorously continue the adjustment effort, in strict compliance with the new programme". Furthermore, the ministers of the Eurozone “insist on the importance of further strengthening Greece's institutional capacity”.
However, Brussels' optimism fails to fully convince the markets. Exchanges remain timid on all the European stock exchanges, with Milan which around 15 pm is even in the red by half a point, above all because Greece 'will activate collective action clauses' (Cac), as confirmed by Juncker himself. The result of the swap was positive, exceeding the vital threshold of 10% by more than 75 points, but the 90% target was not reached.
At this point, the participation of private creditors in the rescue of the country will rise from the current 85,8 to 95,7% only when - through the CACs - the Athens government will force all holders of Greek bonds that come under Greek law to participate in the swap. Greece will thus definitively cut its public debt in the hands of private creditors from 206 to around 100 billion euros, embarking on the road that by 2020 should lead to a reduction in the debt-GDP ratio from the current 160 to 120%.
But now market concerns focus on CDS (securities that function as life insurance of other bonds). The activation of the CAC will probably lead ISDA – the international association on swaps and derivatives – to review its decision on credit default swaps linked to Greece. If the voluntary acceptance of the swap by private creditors did not represent a "credit event", the obligation now imposed by the Greek Executive changes the cards on the table and should trigger refunds on CDs. It would be the first time since the euro existed.
