Mar 9, 2012 — Most of its creditors have agreed to swap their bonds for others worth much less -- a move that was needed before Greece could get a much-needed $172 billion bailout.
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The European Union flag flies in front of the Parthenon in Athens. Greece's EU partners are about to give it another massive bailout. (AFP/Getty Images)
Greece Takes Critical Step Toward Avoiding Bankruptcy
by Mark Memmott
Mar 9, 2012 — Most of its creditors have agreed to swap their bonds for others worth much less -- a move that was needed before Greece could get a much-needed $172 billion bailout.The important takeaway from this morning's news about Europe's financial mess:
It seems less likely that Greece will go bankrupt and more likely that it will get another international bailout that hopefully will shore up the nation's economy and prevent a domino-like tumble of other ailing European nations and the unsettling repercussions that could have for the U.S. economy.
As The Associated Press writes:
"Greece took a big step toward staving off an imminent bankruptcy after securing the support of the vast majority of its bondholders in a critical bond swap that should pave the way for its second massive international bailout."
That bailout from other eurozone nations and the International Monetary Fund is expected to total about $172 billion.
The Wall Street Journal sums up the news this way:
"Just over 80 percent of Greece's private-sector creditors had agreed by a Thursday evening deadline to turn in their bonds for new ones with less than half the face value, touching off a massive debt swap that marks a seminal moment in Europe's long-frustrated efforts to rescue its most financially vulnerable nation."
Or, as The Financial Times puts it (with a lede that's a bit dense for us non-economists):
"Greece was due to complete the largest ever sovereign debt restructuring on Friday as it prepared to squeeze out dissenting bondholders in a move likely to trigger a credit event."
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