On Samaras, PSI, local politicians and retail investors

Believing who?

Dear Mr. Samaras, did I hear any ‘sorry’ about how ND created this mess when in power the last time and did not implement all those changes you do advocate today in order to prevent this mess?

Who believes those guys today?

Hans van der Schaaf

‘Yes (Prime) Minister’

A quote from the popular TV comedy:

“The Opposition aren’t really the opposition, they are only the government in exile. The Civil Service [permanent staff] are the opposition in residence.”

Christine Stephanidou

Re: ?PSI: Gift horse or Trojan horse??

I agree with the article that Greece and the people have to sacrifice a lot, for a long time to come, to achieve results for a better life. But this way, I can see a light far away at the end of the tunnel.

There is no easy way out. A debt is a debt. If we change money lenders all the time we are bound to run out of them. This is what brought the nation to this state. The only thing the Greek people can do is to stay firm in one place and focus on the next step.

Dina Hatzipavlu

What about the retail investors?

What about the retail investors? Are you going to force them to lose their life savings?

If so, then Greece is not entitled to any help. The «deal» was negotiated between the big banks and Greece, the small investors were never invited or consulted and their voice was never heard. The small investors should enjoy higher protection but instead they got the worse outcome: they can’t deduct the losses from their taxes, they don’t enjoy kickbacks or other arrangements, they don’t have deep pockets and can’t afford the losses, they couldn’t hedge their positions (unlike banks), they can’t read or understand the legal issues and more…. In this respect the deal is a disgrace and the public will remember all the politicians involved.

James Peer

PSI to woo investors

You must be joking if you honestly believe that this exercise will have a positive effect for external investment. The opposite is of course true. The actions of the Troika and Greek authorities of changing national law to place the full loss burden on the private and retail sector (and not voluntarily) and in the meantime saving the so-called ‘official sector’ will ensure that Greece will remain in the economic and capital market wilderness for decades.

Any number of precedents can be produced to prove this is not idle speculation.

Karl Swaal

Re: ?Wanted: A new breed of politician?

Great editorial!

The current batch of politicians have hit their use-by date. The current party political ideologies have also passed their shelf life. We need to review the current electoral structure to ensure these people, who have our trust, deliver fair equitable and positive outcomes for Greece.

Failing this the question is «who has the inclination, stamina, and could garnish the support of a corrupted electorate?”

The winner of the next election should be a patriot but will be the politician who will offer a guarantee of a public service job for all the unemployed in Greece.

Good luck

Nik Geronimos

Is 13.95% on original investment really a good deal?

It is quite amazing how much relief (if not applause) is being voiced over the unique opportunity of losing about 86.05% of one’s investment. How do I come to that figure?

It all depends on how the new bonds will trade. So far, I have read comments that they are presently trading, before all i’s are dotted and all t’s are crossed, between 20-30%. One can only hope that they will be trading at higher rates once the i’s are dotted and the t’s are crossed.

Assume they will trade at 30%. This means that holders of 100% debt accepted, in lieu of payment, new and better bonds for 46.5% thereof and they now see those bonds trading at 30%. The simple formula is:

46.5% x 30% = 13.95%

Now, if I am an investor and if I see myself ending up with only 13.95% of my original investment, I surely want a better deal. What do I want?

Very simple! All I want is the potential of an upside. In other words, I do not want to forgive all my claims for the 53.5% outright but, instead, I am willing to wait for principal and interest for, say, 50 years. If someone tells me that I should wait for 99 years, that’s fine with me, too. I will not live to see the 50 years, much less the 99 years.

But there is one thing which I may see much sooner. If I accept the above type of settlement for all debt exceeding the 60% Maastricht-level, the remaining debt will be within the 60% Maastricht-level and it should be quite solid because it is in a senior position to all other debt. Thus, it should trade close to 100%.

If that happens, then the future outlook for Greece will change quite rapidly. And if accompanied by some sensible growth strategies, Greece might soon be in an upbeat mode. And then the above evergreen bonds which started trading at near 0% will begin trading at higher rates. Mind you, something which starts at 0% and goes to, say, only 2% has just experienced an infinite percentage increase!

Klaus Kastner