But wait, we thought Greece and the ECB had an upper hand? Wouldn't they exercise said upper hand by now, considering its now 9pm in Greece on a Sunday, the day before the critical European finmin meeting by which point the Greek deal was supposed to be in place?
From Reuters [9]:
Greece's private creditors are working closely with Athens on a debt swap deal, their chief negotiator said on Sunday, adding that he was confident a deal could be reached.
"We are at a crossroads and I remain quite hopefull," International Institute of Finance chief Charles Dallara told Antenna TV on Sunday.
Greece and its private creditors are converging towards a deal but many details are still unresolved, sources close to the negotiations said during the weekend. Much of the attention will now turn to a meeting of euro zone finance ministers on Monday, and to how EU states and the IMF view the progress in the debt swap talks.
...
Much of the attention will now turn to a meeting of euro zone finance ministers on Monday, and to whether EU states and the IMF consider that the deal that is being put together by Athens and bankers does put Greece's debt back on a sustainable track. One key question will be whether the deal attracts a big enough participation rate.
"We are working together with the Greek government, European and global leaders and we can mobilise very very high participation," Dallara said.
And here is the FT:
Private owners of Greek debt have made their “maximum” offer for the losses they are willing to accept, the bondholders’ lead negotiator has said, implying that any further demands could kill off a “voluntary” deal and trigger a default.
Charles Dallara, managing director of the Institute of International Finance, said in an interview that he remained “hopeful and quite confident” the two sides could reach a deal that would prevent a full-scale Greek default when a €14.4bn bond comes due on March 20.
One banker said Friday’s demand by official creditors, led by the International Monetary Fund, for a further interest rate cut of 50 basis points on new long-term bonds to be swapped for existing Greek debt “may have put a voluntary deal out of reach”.
“I think its clear we are at the limits of a voluntary deal,” Mr Dallara said, recalling that eurozone heads of state had committed to keeping the restructuring voluntary at a high-stakes EU summit in October. “It is clear to me we are at a crossroads.”
As we noted last night [10], Hedge Funds are just hoping for litigation. Scratch that, praying.
Too bad hold out hedge funds with a blocking stake can't pay their LPs with hope. In the meantime, the EURUSD is not happy to start the Sunday session.
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