Feb. 23 (Bloomberg) -- If Europe’s new plan for Greece
succeeds, nobody will be more surprised than the politicians who
designed it. At best, the arrangement is a holding action, one
that fails yet again to deal with the much larger confidence
crisis facing the euro area.
The deal announced on Tuesday starts with private lenders.
Their representatives agreed to accept even bigger losses on
Greek government bonds than previously discussed. The bonds’
face value will be cut by 53.5 percent, and they’ll pay a low
interest rate, starting at 2 percent then rising later.
Altogether, this reduces their net present value by about 75
percent, far more than deemed necessary just weeks ago.
