Tuesday, January 25, 2011

''THE MANILA MODEL'' DER SPIEGEL

''But where would Greece get the money for such a buyback scheme? This is where the EFSF would come in. It would give the country a credit line, and Greece would benefit because the interest on the EFSF credit would be lower than the interest rates on its regular bond issues. In addition, the repayment periods would be more favorable. Ultimately, it would give Greece more breathing room.
One variation of the plan would call for Greece itself to raise the money for the operation by issuing new bonds. These would be guaranteed by the EFSF and would therefore have much better credit ratings than Athens could muster on its own. The Greek government's borrowing costs would be lower. Regardless which model is ultimately favored, Greece would be given additional leeway.
Regling has already proven once before that his idea works. During the mid-1980s, he worked at the International Monetary Fund (IMF) in Washington and Jakarta, where he developed a similar procedure for rescuing the Philippines from a financial emergency. The attempt succeeded and the government in Manila was able to reduce the country's debt burden with aid from IMF loans..'' 
http://www.spiegel.de/international/europe/0,1518,741268,00.html

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