7 Key Points On The Latest Greek Bailout

Greece santorini

Photo: Wikimedia Commons

Last night, European leaders announced a €130 billion bailout for Greece, with the aim of getting the country’s debt-to-GDP ratio down to 120% by 2020.Nomura has assembled 7 key points on the latest Greek bailout.

We summarize:

  • Greece has found another €325mn to cut.
  • The Troika will now have a significant presence on the ground in Greece to make sure reforms are happening.
  • An ‘escrow account’ — ensuring that all bailout money is prioritised for bondholders — will likely be established.
  • The nominal haircut has increased to 53.3%, and the coupon on those bonds will be well below market rates.
  • Profits from the Securities Markets Program will be given up to improve Greek debt sustainability.
  • Other profits from Greek bonds held by National Central Banks will be given up to help Greece’s debt sustainability.
  • A lowering of interest rates on all loans to Greece.

For more on some of the economic assumptions underpinning the whole deal, see here.

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