The war of words between Europe and private investors heated up Tuesday as talks to reduce Greece’s massive debt burden hit an impasse.
While the finance ministers of the countries that use the euro as their currency adopted a tough stance on how much rescue money they would pump into the Greek economy, the head of the group that represents the country’s private creditors _ banks and other investment firms _ warned that the future of Europe was being threatened if a voluntary debt reduction deal over Greece was not agreed.
Charles Dallara, the managing director of the Institute of International Finance, warned that Europe is putting decades of progress at risk over the management of Greek debt-reduction talks, which stalled over the weekend.
“European stability is at stake as well,” Dallara said at a news conference in Zurich.
On the front line of Europe’s sovereign debt crisis, Athens is trying to get its private creditors to swap their Greek government bonds for new ones with half their face value, thereby slicing some euro100 billion ($130 billion) off its debt.
Debt is a crazy thing, and while laws vary state to state, there was a question that I was reading about the other day, and I thought I would set aside a few hours to explain the following:
