The processes for the repurchase of bonds are climaxing

The Finance minister has described the participation of Greek banks and pension funds in the debt repurchase program as "patriotic duty", but it seems that the Greek bankers think differently.

At the meeting between the representatives of the Union of Greek Banks and Yannis Stournaras that will be held at noon, the former will explain that under the existing conditions and without compensatory measures, it is unlikely for them to join the program for the repurchase of bonds. The question is what the argument of the Greek minister is going to be, as banks and insurance funds fear dozens of lawsuits against them by shareholders and the insured in case they relent and join the voluntary haircut.

Regarding pension funds Stournaras said, "they are a special case as they belong to the general government. Let them decide for themselves." If they do take part in the repurchase program, almost all supplementary funds and some major insurance funds will have a significant liquidity problem, such as those for the self-employed (doctors, lawyers, etc.).

Time limits are currently extremely short, as the bond repurchase program should be completed by December 12 in order for the tranche of 32 billion euros to be released. The question is what will happen if the program does not succeed. Stournaras said that "there is a plan B» and referred to the proposal in the Eurogroup announcement. Asked whether the banks should join the bond repurchase program, he again said that "the process is voluntary."

According to the minister, the debt repurchase "is voluntary and must succeed. It is a question of credibility of the country." During yesterday's press conference he reiterated the need for everyone’s participation in the repurchase of the state debt. He indicated that its success will determine the final decision on the payment of the first tranche of 34.4 billion euros, which he said will come on December 13.

The bonds are at the highest prices since the date of their issuance, so any investor can assess the pros and cons, said PDMA executive director Vasilis Mastrokalos. He added that the secured money for this purpose is very specific and if all investors come to participate in the project, it will be a "first come – first served" process. On the day of their issue (12/3), the average price was 25% of the nominal value, during the summer it fell to 14% and these days it stands at 28-29%. He admitted that the amount that will be needed to repurchase the debt may reach 10 billion euros, but that will depend on the final participation.

Stournaras referred to major challenges facing the country:

- the implementation of structural changes such as the tax bill, the general secretary of revenues and the implementation of the prerequisite actions

- the privatization program, which has been significantly delayed.