Trichet is pointing towards restructuring or extension

The recent “unexplained” explosion in the spreads of Greek bonds by over 1.300 points for the ten-year bonds and the subsequent sinking of the price of bonds was a confirmation of rumors about debt restructuring and the scenarios disseminated mainly from abroad.

No one can be certain whether the increase in spreads is due to rumors of restructuring or whether the rumors started the increase.

However, the most serious development associated with spreads and rumors is the decision of the European Central Bank to halt the purchase of Greek bonds, probably considering that there is no reason to continue.

Please note that the ECB had decided to accept the purchase of Greek bonds to reduce excessive market reactions to the Greek bond market after the establishment of a mechanism to support Greece and given that the bond market had practically stopped working.

However, over the last 15-20 days, the ECB has stopped buying Greek titles.

The markets interpreted this development as a precursor to a decision already made toward an imminent and rapid restructure of the Greek debt, possibly through the repayment extension of the old, pre-Troika debt, which has reached 340 billion euros.

Furthermore, the ECB is already recording accounting losses of about 3 billion euros from the Greek bond market. Last time they were closer to 50 billion.

It should be noted that this decision had nothing to do with the policy of the ECB to accept Greek titles as guarantees from the Greek banking system in order to provide liquidity, which continues normally.

Moreover, the liquidity of Greek banks will continue to be strengthened by the new, and still unused, security package of 30 billion.

Finally, it should be noted that several executives of dealing rooms are linking the surge in spreads and the strengthening of speculation about restructuring with the end of CDS (Credit Default Swaps), i.e. the risk premiums concerningthe Greek bankruptcy, which have also been soaring lately.