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04.02.2015 16:40

Press Review: Greece Seeks Third Debt Restructuring: Who’s on the Hook?


Greece Seeks Third Debt Restructuring: Who's on the Hook?

(Bloomberg) -- Greece's anti-bailout governing coalition wants to reduce the country's debt burden. Who's on the hook if they succeed?

Prime Minister Alexis Tsipras has pledged to repay in full obligations to the International Monetary Fund and the European Central Bank. Finance Minister Yanis Varoufakis outlined plans to swap some debt into new securities and link repayment with economic growth. Both have said private investors won't be asked to shoulder additional losses after taking the hit in two restructurings since the start of the euro financial crisis.

Euro-region governments and the crisis-fighting fund they set up in 2010 are owed almost 195 billion euros ($221 billion) by Greece, mostly in emergency loans. That's about 62 percent of the total debt and compares with 17 percent held by private investors.

Governments and national central banks are also contributors to the ECB and the IMF so taxpayers would be exposed should Greece go back on its pledge to make those creditors whole.



China January HSBC services PMI at six-month low, more stimulus expected

(Reuters) - China's services sector grew at the slowest pace in six months in January as growth in new business weakened, a private survey showed, raising expectations that policymakers may unveil more stimulus steps to avert a sharper slowdown in the world's second-largest economy.

The HSBC/Markit Services Purchasing Managers' Index(PMI) slowed to 51.8 last month - the weakest since July 2014 - from December's 53.4, but remained above the 50-point level that separates growth from contraction in activity on a monthly basis.

The weakening performance of the services sector, which has helped cushion the broader impact of a cooling manufacturing sector, could fan market concerns about China's economic slowdown in 2015.



Japan government delays BOJ nomination, stirs worries about political battle

(Reuters) - Japan's government unexpectedly delayed a widely expected nomination to the Bank of Japan's policy board on Wednesday, raising concerns the appointment could become ensnared in a political battle with opposition parties.

The Nikkei business daily reported earlier that academic Yutaka Harada, a proponent of aggressive steps to end deflation, was expected to be nominated on Wednesday to the central bank's nine-member board.

Harada, 64, was intended to replace Ryuzo Miyao, a 50-year-old former academic and a policy dove whose five-year term expires in March. Miyao supported additional monetary easing in a 5-4 vote in October.


Market focus

  • BOJ keeps policy steady, signals chance of easing in October
  • UK retail sales fell slightly in August
  • Fed lowers interest rates by 25 basis points, as expected
  • SNB leaves policy rate unchanged at -0.75%
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