IIF Dallara: Press statement on euro area stabilisation measures

27 October 2011

Dallara, Managing Director of the Institute of International Finance, welcomed the announcement by the leaders of the euro area of a comprehensive package of measures to stabilise Europe, to strengthen the European banking system, and to support Greece's reform efforts.

On behalf of the private investor community, the IIF agrees to work with Greece, euro area authorities and the IMF to develop a concrete voluntary agreement on the firm basis of a nominal discount of 50 per cent on notional Greek debt held by private investors with the support of a €30 billion official PSI package. This should set the basis for the decline of the Greek debt to GDP ratio with an objective of reaching 120 per cent by 2020.

The specific terms and conditions of the voluntary PSI will be agreed by all relevant parties in the coming period and implemented with immediacy and force. The structure of the new Greek claims will need to be based on terms and conditions that ensure an NPV loss for investors fully consistent with a voluntary agreement.

Statement

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