The Greek parliament approved the program for restructuring of state debt, involving exchange of bonds for new ones with writing off over 50% of notional value, Interfax reports.
Greece is expected to file the proposal to creditors on Friday. The exchange will be organized on March 9 and will total about €206 billion.
Private creditors of Greece will write off 53.5% of notional value of old bonds. Private creditors hold about 31.5% of Greek debts, which will be exchanged for 20 tranches of new bonds for 11-30 years. Other debts will be exchanged for short-term documents of the European Stability mechanism. Real losses of creditors will exceed 70%.
The process will reduce the Greek debt by €107 billion, about half of GDP in 2011. The state debt would reach a maximum of 168% of GDP in 2013 and then start dropping. Restructuring of the Greek state debt will exceed the process in Argentina of 2005 threefold.
Fitch says that conclusion of the operation would result in the default rating of Greece. Fitch lowered the rating of Greece to C, the lowest rating is D.
Earlier plans were to exchange bonds on March 12. Banks would write off 107 billion euro. Experts say that Greece may be hit by a default on March 12.
