IlliquidX, the distressed debt platform which offers clients trading in stressed and/or defaulted debt; high yield debt; illiquid structured products and illiquid equities and convertible bonds, has constructed a timeline on proposed solutions to the Greek debt crisis.
Ruling socialist party Pasok just manages to push through the €78bn Medium Term Austerity plan by a narrow majority. At the same time, public sector trade unions called a 48-hour general strike to protest against austerity measures, including the cutting of 150,000 jobs.
Greek Parliament approves a separate enabling legislation to accelerate the reforms and establish a stand-alone privatisation agency to handle more than 20 disposals by the end of the year
German Banks agree to “offer a hand” to debt-laden Greece, by agreeing to contribute to the “French Plan” with approximately €2bn. Similarly, other international banks and insurers also throw their weight behind plans to roll over sovereign bonds and reinvest in the country over a longer period or buy back debt.
EU finance ministers in a precipitated teleconference approve the disbursement of €8.7bn but signal that the nation must expect significant losses of sovereignty and jobs, noting that it must privatize state assets on a scale similar to the sell-off of East German firms after the fall of communism in the early 1990s.
The EU Commission releases a report in which it reiterates its stand against the restructuring of the Greek debt, maintaining that the negative consequences would outweigh any gains from debt restructuring, but for the first time it contains a section on debt restructuring, including a scenario for a 40% haircut.
The IMF Executive Board meets to approve their €3.3bn portion of the fifth loan tranche to be disbursed. For markets to avoid a technical default, Greece must receive €12bn in EU and IMF loans by 15th July so all formal decisions to will have to be taken by around 8th July.
Approval of a second bailout of €170bn (to cover the 2012-2014 period), including leftovers from the first rescue, privatisation and voluntary rollovers. More specifically, it is expected to be filled with €45bn of loans, €57bn in unspent aid from the 2010 bailout, €30bn in asset sale proceeds, and €30bn from creditors.
ECB meeting where more likely than not the ECB will follow through on its signalled 25bp rate hike.
The Eurozone Finance Ministers meet again to finalise details on package for Greece. There is no need to have a new vote by member states to disburse the new bailout tranche, but there needs to be a vote in order to increase the size of fund and enable changes in the European Stability Mechanism
July 15 – End August
EU bank stress tests expected.
Default deadline: without an agreement on a second bailout that will trigger the €12bn plan, Athens will run out of money and will also be the first Eurozone country to experience sovereign default. About €4bn of Greek debt will mature, and €3.3bn of coupon must be paid. Greece has a total of €18bn to be repaid by the end of August.
July 15: 6-month Greek Treasury bills worth €2.4bn mature
July 19: coupon must be paid
July 22: 3-month Greek T-bills worth €2bn mature
August 12: 6-month Greek T-bills worth €480m mature
August 19: 3-month Greek T-bills worth €2.0bn mature
August 20: A €5.9bn, 3.9% 5-year Greek government bond matures.
Greek PM Papandreou has announced a referendum will be held this autumn on Greek electoral and political changes, including the responsibilities of ministers. This could develop into a de facto test
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