Greek debt swap complications!

8th March is the final deadline by which Greece needs to carry out the debt swap with its private creditors. This crucial operation might encounter problems however as it is rumoured that private bondholders are rather reluctant to take part in it.

Unless 90% of the creditors sign up for the deal, the Collective Action Clauses inserted into Greek bonds last week would be activated; if participation falls below 66%, the deal would collapse completely and Greece would be facing a default on its debt.

Investor optimism deteriorated on Monday, following Chinese PM Wen Jiabao’s announcement that the growth forecast for China for 2012 had been cut to 7.5%, in comparison with the previously estimated 8.5%. The Premier attributed the reduction to high inflation as well as grim global economic prospects.

According to the recent report from the British Chambers of Commerce (BCC), the UK will avoid a recession this year, and the Bank of England will not need to inject any more stimulus. It stated though, that the economic recovery is expected to be weak, and the government should concentrate its efforts to boost growth.

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