Venizelos: "Selective default" does not mean "bankruptcy"

His optimism that a final solution to the Greek debt problem which divides the EU will be provided in due time before September 15th, was expressed by Minister of Finance.

Mr. Evangelos Venizelos tried to remove any aspersions not only as to the possible involvement and role of private investors in the Greek debt solution, but also even the country’s “selective default”.

Essentially, he disconnected the term from a “credit event”, since he argued that the risk premiums will not be activated in this case and will not fill the coffers of all those who have been trying to “bankrupt” the country.

As he noted, the word “selective default” is unnecessarily frightening. It is not real bankruptcy; it is not a real economic event. It’s a review of all three rating agencies in bonds. If we are calm and wise and we implement our plans, we can use everything to our advantage. Everything is done to provide a solution and a way forward”.

The guarantees are also part of the "trick", if there is a “brave” bailout plan. Mr. Venizelos stated that the term “tangible guarantees” in the Eurogroup’s official communiqué should be on the table, even though it does not involve Greece. “If we face a problem of guarantee mechanisms, we must do it. With the assurance that there will be a cut in interest rates, increased debt repayment periods and a repurchase of bonds, if these things are put on the table. In any case, the whole matter of securities is linked to the new mechanism of financial stability”.

The solution that Mr. Venizelos is expecting for Greece is a “crystal clear” and strong message for the complete coverage of the country’s financial system, either by the ECB or member states and other institutions such as the Permanent Support Mechanism.

“My position in the Eurogroup”, he said, “was that we are ready to enter a new program, but we want these things to move forward now, in the following weeks, before the 15th of September and the 6th installment”. He also added that we need:
-A reply that reassures markets
-A solution prior to September 15th
-Full institutional coverage over the borrowing institutions and the country’s financial system.

Mr. Venizelos stressed that the political consensus strengthens Greece and that “the invitation to the opposition for joint negotiations is always open”.