Germany's biggest newspaper says 'No' to Greek debt writeoff

BERLIN - Agence France-Presse

Communist-affiliated union supporters protest outside the Greek Parliament against the new austerity measures in central Athens, on Thursday, Feb. 9, 2012. AP photo

Germany's biggest selling newspaper, Bild, said on Wednesday that it opposed a writedown of Greek debt, arguing the move will not help Athens get its finances in order in the long run.

"The Greek debt writedown is coming to private (small) investors. Also to Bild," it said. "But we say 'NO'." Bild, which claims a 12-million-strong readership in Germany, said it had bought 10,000 euros ($13,100) worth of Greek sovereign bonds at a discount price of 4,815 euros in December 2011. But under an agreement between Athens and its major creditors, investors are being asked to take a writedown of at least 70 percent on their bond holdings in order to prevent a sovereign default.
 
In Bild's case, the writedown -- known as a "haircut" -- means the value of its Greek bonds would be slashed to just 3,000 euros. So even taking into account the huge discount price it paid for the bonds, it would still represent a 38-percent loss on its holdings, the newspaper complained.
 
The deal has been accepted by several global banks and Athens has already passed legislation to force recalcitrant bondholders to participate if a majority agrees to the debt rollover.
 
Banks, insurers and investment funds holding debt issued under Greek law must decide by 2000 GMT Thursday, while those who hold debt issued under foreign law have until April 11 to decide.
 
Bild dismissed the writedown deal as a "sham," arguing that many of the assumed economic scenarios on which the deal was based were "unrealistic". "It alone will not help Greece back on its feet," Bild said and also questioned whether agreements would be adhered to after Greece's April elections.
 
However, the paper added a P.S.: "If Bild should however make a profit with the bonds it will be donated to a good cause," it said.
 
Bild last week urged the Bundestag lower house of parliament to reject a second rescue package for Greece.