Banks and insurers, who were supposed to declare Friday whether they would join the bond exchange that was a condition of a second bailout for Greece, were slow to declare themselves, and a shortfall was feared at midday.
Reuters reported that the level of participation was expected to come in around 70%, considerably short of the 90% target. There was the potential for latecomers to declare just before the deadline, but officials were more focused on the lower number as the day progressed.
The bailout is already in danger thanks to Greece’s failure to meet its economic targets, and Athens itself had threatened to cancel the agreement if the 90% participation level is not reached. However, the country has little choice but to proceed regardless. The 90% goal would provide for 135 billion euros ($189 billion) of Greek bonds maturing by 2020 either exchanged or rolled over in a global transaction.
Reluctance to participate could be chalked up to the current impasse between International Monetary Fund (IMF) and euro zone officials and the Greek government over missed fiscal goals; inspectors from the IMF have left the country and talks have ceased regarding the next tranche of loans. The interruption had not been planned.