Greece will see the benefits of a landmark debt swap with private creditors “sooner than expected” if it sticks to planned reforms, a senior bank official who helped steer the deal said Sunday.
Greeks “will start seeing the benefits sooner than expected... I can see the light at the end of the tunnel much sooner than others can,” Charles Dallara, managing director of the International Institute of Finance, told Ethnos daily.
The IIF, a global association representing over 400 banks and investment firms, worked with Greece and the EU for months on the landmark deal to erase over 100 billion euros ($133 billion) from Athens’ near and midterm debt.
A broad majority of Greek debt holders accepted the offer on Friday and the actual exchange will take place on Monday.
Holders of Greek debt are to receive new bonds with a face value equal to 31.5 percent of the face amount of the debt exchanged, plus short-term European Financial Stability Facility backed by the EU’s strongest economies.
They will also receive growth-linked Greek securities.
“I believe that pessimism should go home for awhile and give hope a chance to grow. No other country has ever seen so much debt destroyed. This will happen on Monday in the space of a minute,” Dallara said.
The record-breaking debt swap is tied to a eurozone bailout worth 130 billion euros which Greece urgently needs to avoid default on March 20 when debt repayments are due.
After two years of austerity policies to secure a previous EU-IMF bailout in May 2010, Greece is caught in a deepening recession that has left over a million unemployed, with forecasts for a return to growth repeatedly dashed.
“Greece can do it,” Dallara said on Sunday.
“The seeds planted today will take some time to sprout,...it may take months, but it will happen.”
“If the Greeks set forth their determination and if they apply the reforms, their efforts will not be in vain...new jobs will be created and many positive changes will happen... I feel rather relieved and quite happy for Greece,” he said.
“Greeks are people of many qualities, they are good businessmen and the workforce is highly educated. The unemployed have a high level of education,” Dallara said.