por admin » Jue May 27, 2010 6:56 pm
Grecia tendra que restructurar su deuda
No ocurrira maniana ni pasado pero Grecia tendra que restructurar su deuda.
Restructuracion es basicamente default.
Greece May Yet Have to Restructure Its Finances
By CHARLES FORELLE And TOM LAURICELLA
Even as investors grapple with the short-term economic impact of the European debt crisis, an important longer-term issue lingers in the background—the likelihood that Greece will have to restructure its debt.
Analysts and investors don't think this is likely soon. The financial markets are too unsettled to weather such a dramatic step and the bailout by the European Union and the International Monetary Fund gives Greece much-needed breathing room.
While a restructuring may not take place for another year or two, it's a move that Greece may be unable to avoid, many say, despite assurances to the contrary from officials at the EU and IMF.
Restructuring is essentially a default, under which Greece would renegotiate its debt with bondholders, either lengthening its maturities or reducing the amount it owes, causing bondholders to take a loss.
"At this point, it is very clear that restructuring is the only option," says Lena Komileva of Tullett Prebon in London.
Josef Ackermann, the chief executive of Deutsche Bank, said earlier this month he thought it "doubtful" that Greece would be able to repay all its borrowings.
The EU and IMF's bailout plan, which involves €80 billion ($99 billion) in loans from the 15 other euro-zone countries and 30 billion from the IMF, is designed to keep Greece afloat for a few years while the country enacts giant cuts and fiscal reforms.
While restructurings by sovereign nations are rare, they are invariably painful. In late 2001 Argentina defaulted on $82 billion of debt and investors recovered just 30% of their money, according to Moody's Investors Service. Some holders, who held out for more, are still fighting. Investors holding Russia's debt after its 1998 default recovered about 50%.
The Greek government had debt at the end of last year equivalent to 115.1% of the country's GDP. That ratio will rise sharply through 2012 toward 150% of GDP. Above a European Union flag, left , flies with the Greek national flag at the foot of Acropolis hill in Athens.
.While the extent of the losses from such a move by Greece remains unclear, Standard & Poor's said in late April that investors could expect to recover 30% to 50% of their money.
One reason a near-term restructuring isn't likely, analysts say, is that much of Greece's debt remains in the hands of European banks and a restructuring could inflict sizable losses.
But because the European Central Bank has been aggressively buying up government debt, Greece will eventually have fewer private debtholders to persuade, making a later restructuring easier to engineer.
The basic problem is that even with aggressive fiscal belt tightening, the outlook for the Greek budget deficit is grim.
The Greek government had €273.4 billion in debt at the end of last year, equivalent to 115.1% of the country's gross domestic product. That ratio will rise sharply through 2012 toward 150% of GDP, since a yawning budget gap adds more to the tab each year. There are few signs that the stagnant Greek economy will grow anywhere near fast enough to catch up.
With those kinds of debt levels, "the notion of paying off banks in Western Europe is not going to go off very well" in Greece, said Eswar Prasad, a former IMF official now at Cornell University. Especially since "you are going to have to squeeze social expenditures so much."
A close look at the Greek financial situation shows why some expect a debt restructuring within the next two years, according to Mr. Prasad, who spent 16 years at the IMF.
Right now, Greece needs to borrow to help pay for the daily operations of government, like salaries for government workers. So it needs to keep creditors happy. In fact, in 2009, the country was already €20 billion in deficit before it forked out for interest payments.
But by 2012 that so-called primary deficit will flip to a surplus of about €2.4 billion, according to IMF estimates. That means Greece will be generating enough money to fund itself, and instead would be borrowing just to fund its interest payments, a precarious cycle.
In that situation, it could better afford to restructure and presumably anger lenders.
The country's interest payments are growing. In 2012, Greece will be paying out €17.1 billion, up from €11.9 billion last year. In 2014, when Greece's debt is projected to peak at €353.8 billion, it will pay €20.4 billion to creditors.
"The bottom line they just don't have an ability to service the debt," said Michael Cirami, a portfolio manager at Eaton Vance.
The high burden, economists say, would strengthen a Greek push to reduce its interest payments. And the only way to do that is to repay the debt, or restructure.
High interest payments and no primary deficit "are the exact circumstances," wrote Citibank's Willem Buiter in an analysis earlier this month, "that make a default individually rational for the debtor." Ultimately, "a Greek sovereign debt restructuring is unavoidable," he wrote.
But while the bailout package would still leave Greece facing big deficit issues, it also holds the possibility of stabilizing the European bond markets, says Mr. Cirami at Eaton Vance. As a result, "it could make restructuring more feasible."
As the numbers presently stand, in 2014 Greece will once again have to convince private lenders to provide big sums. The IMF projects Greece will need to borrow €70.7 billion and will have €265 billion in debt to the private sector—about where it was in 2009. At the same time it will also owe €85 billion to the EU and the IMF.