Haircut? Banks agree 50% reduction on Greece’s debt


David Gow
Guardian

October 27, 2011

Europe’s leaders are claiming a victory in the eurozone crisis after agreeing new deals that halve Greek debt and increase the firepower of the main bailout fund to around €1 trillion (£872bn).

Athens will be handed a new €100bn bailout early in the new year. The accord was reached in the early hours of Thursday after hours of debate.

At one stage talks broke down with holders of Greek debt but they ended up accepting a loss or “haircut” of 50% in converting their existing bonds into new loans.

Investors are likely to welcome the breakthrough. Sharp gains are predicted for European markets on opening, with the FTSE 100 being called up 75 points and similar rises expected on the German and French stock markets.

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