A crucial week for the debt haircut

Next Thursday evening, which is the deadline for the voluntary contribution of the private sector to the haircut of the Greek debt and the exchange program, will determine whether Greece can win the bet of drastic debt impairment, a prerequisite for the new loan agreement of 130 billion euros.

The road for the Greek government will be very difficult, even though Charles Dallara shows optimism, sending signals to private bondholders to participate in the exchange of bonds.

By March 8 there must be a high response rate by bondholders in agreeing to retain the new Greek bonds until 2042. Furthermore, the government - which hopes the program will succeed without the activation of CAC's, despite the numb start - should publish dozens of decisions to reduce the operating costs of the State, doctors' on-call hours, pharmaceutical expenses and unemployment allowances, in order for the lenders to give the final OK.

By March 14, the PSI must be successfully completed, so that the first tranche of the new loan can be disbursed immediately in order to pay the large bond amounting to 14.5 billion euros, which expires on March 20.

Once the formal inspection by the Troika is completed, and confirms that all outstanding issues have been dealt with, then the rest of the money will be disbursed.

The commitments undertaken by our country until June include measures for the 2013-2014 period. These will entail large cuts in expenses and will result from a study, conducted by the ministry of Finance with the assistance of an independent third party, who will advise the government on expenses that could be reduced.