Bakoyannis slams gov’t for ‘betraying’ small bondholders

Democratic Alliance chief Dora Bakoyannis on Friday attacked government coalition partners PASOK and New Democracy for failing to protect small bondholders against losses suffered in Greece’s recent debt restructuring deal.

?We cannot betray the people who put their trust in us and purchased Greek bonds,? Bakoyannis said in Parliament, accusing the government of ?making a mock of small bondholders.?

About 11,000 thousand people saw a big chunk of their investments go up in smoke in a debt restructuring program, or PSI, dictated by Greece’s bailout deal with the European Union and the International Monetary Fund.

The government had previously said that citizens holding Greek bonds worth up to 100,000 euros would not be affected by the debt swap. But then Greece used collective action clauses to increase participation of investors in the program.

Finance Minister Evangelos Venizelos has often praised the «patriotism» of small investors and promised compensation once the operation is successfully completed.

Responding to Bakoyannis’s allegations on Friday, deputy Finance Minister Filippos Sachinidis did not provide much comfort for small investors.

?We all know what must be done, but we all know what the decisions of the Eurogroup are,? he said in reference to the euro area finance ministers. ?No one can ignore them,? he said.

The head of the Eurogroup Jean-Claude Juncker earlier this week said that Greek small bondholders will not receive any extra compensation beyond the offer being made to all investors.

The amount involved is around 2.3 billion euros, in other words less than one percent of the total debt involved in the haircut.

Under the deal, an individual who invested 100,000 euros takes an immediate loss of 54,000 euros and he will not collect the rest of the money before 2041.

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