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If not enough private-sector bondholders were to agree to participate in the bond swap per the PSI requirement, the Greek government threatened to retroactively introduce a collective action clause to enforce participation. [14] Eventually, private-sector involvement reached 83,5% of Greek bond holders. [15]
For the first time, this also included a Private Sector Involvement (called a PSI), meaning that the private financial sector accepted a "voluntary" haircut (finance). It was agreed that the net contribution of banks and insurance companies to support Greece would include an additional €37bn in 2014. [4]
In October 2011, Papandreou got parliamentary backing for further austerity measures. These new measures would allow Greece to get an extra instalment of international loans, forming a second bailout package that would prevent a sovereign default and would allow the partial write-off of Greek debt, the so-called private sector involvement (PSI ...
As a result, Greece was granted by the EU a €100bn loan and 50% debt reduction through "private sector involvement" (PSI) as a quid pro quo for future reductions in government spending . [43] The measures included among other 22% cut in minimum wage that goes to €586 from €750 per month.
The second economic adjustment programme for Greece called for a further labour cost reduction in the private sector of 15% during 2012–2014. [ 298 ] In contrast Germany's unemployment continued its downward trend to record lows in March 2012, [ 299 ] and yields on its government bonds fell to repeat record lows in the first half of 2012 ...
The latter allowed Greece to retire about half of the €62 billion in debt that Athens owes private creditors, thereby shaving roughly €20 billion off that debt. This should bring Greece's debt-to-GDP ratio down to 124% by 2020 and well below 110% two years later. [102] Without agreement the debt-to-GDP ratio would have risen to 188% in 2013 ...
Greece has signed two loan agreements with the IMF: a Stand-By Arrangement from 2010 to 2012 and an agreement under the Extended Fund Facility from 2012 to 2016, borrowing a total of 27,766.3 million SDR. [4] Greece owes the IMF 6,735.64 million SDR, [4] and is the fund's third-largest borrower (after Argentina and Ukraine). [5]
For instance it was used to fight the private sector involvement option (2011–2012); In 2011 there was a unanimous agreement among all the member state to cancel part of their debt but the ECB fought against that, the ECB forced the EU countries to restructure their debts by not accepting those debt anymore in their collateral framework which ...