This is an economic term you will probably be reading and hearing in the upcoming weeks – or at least until Greece’s obeys to the calls for a debt restructure: “Voluntary Agreement” What is this? This is originally designed to provide relief to debts generated as a result of business insolvency, or else bankruptcy.
It looks as if some technocrats in the European Union favor this VA as the “new” term of Greece’s fight against debt crisis. To come to a “voluntary agreement” with the markets regarding the extension of maturity of Greek bonds, which mature in the 2012-2015 period with the change of interest rates.
This is a partial debt restructure based on an agreement with the creditors on specific conditions set by both sides. I personally favor a package debt restructure within the EU as Greece is part of the euro crisis – but nobody asks me.
Despite official denials, European Commissioner for Economic and Financial Affairs Olli Rehn reportedly favors procedures of “voluntary agreement” on Greece’s initiative, according to Greek weekly newspaper Kefaleo.
Such a procedure could be welcomed by the Commission, provided that it does not create a sentiment of total debt restructuring with losses for bondholders, an EU official told Greek economic news portal and newspaper Capital.gr.
Source: Capital.gr