Hedge funds speculate on Greek default
Today is the deadline for private investors in Greek government bonds to decide to what extent they will voluntarily participate in a debt relief deal. The Association of International Finance (IIF), which negotiated the so-called “haircut” with the Greek government, has warned of catastrophic consequences should the debt swap agreement fail to be implemented. IIF President Charles Dallara said Tuesday that an uncontrolled default of Greece would cost more than a trillion euros, as the resulting panic on the markets spread to Spain and Italy. Under the headline “Fear of a Trillion Bankruptcy”, the German financial newspaper Handelsblatt reported Wednesday that some banks were “speculating on a decline of the euro”.