Filed Under:

No, Hedge Funds Can't Foreclose On The Acropolis

Play associated audio

Greece is broke. But there's no blueprint for a country to declare bankruptcy, so Greece's creditors are sort of making things up as they go along.

"You're taking some sort of loss," Hans Humes of Greylock Capital Management told me. "But it's like, how much of a loss do you take? There's this thing called sovereign immunity. You can't go in and take the Acropolis."

Greylock Capital Management is a hedge fund company that holds Greek bonds. So Humes is sitting across the table from Greece. There are lots of other creditors — people sitting alongside Humes — and they all want different things.

Hedge funds want as much money as they can get back. European banks want their money back, too, but they also want the euro to stay strong. Greek banks just want to make sure the Greek government doesn't implode (but they also need some money back).

And the European Central Bank wants all of its money back, so far, and doesn't want to take a loss at all. All of these people are on the same side of the table, but they have vastly different motivations.

The Greek side is just as diverse. It's the European Commission, it's Germany, it's the IMF — it's a whole slew of people, way beyond the Greek government that did the original borrowing.

"I've had the feeling a couple times," Humes says, "when you'll be making progress, really tangible progress, and something will come out from somewhere, and you sort of have to go back to the drawing board, you know, we have to check with so-and-so."

This happens on both sides of the table.

Humes' side did come to a consensus, as announced Monday night. They put a 50 percent loss on the table. They agreed to accept 50 percent of the money they are owed — to be paid out over a period of time.

The other side of the table? The Greek side? They sent it back. Discuss. Start over.

The stakes are huge. If they resolve this amicably, then business might be able to continue as usual in Europe: countries borrowing money, people showing up to lend it to them.

But if they don't, Greece will have a hard, chaotic default. The kind of default that could mean a halt to business all across Europe.

Greece only has enough money to make it until March 20. It needs the next round of bailout money. But in order to get that money, Greece has to cut a deal.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

NPR

Gay Talese Disavows His Disavowal Of His New Book

Talese had told The Washington Post he wouldn't promote his new nonfiction book, The Voyeur's Motel, after the paper found flaws in its story. But now he says the book will go ahead as planned.
NPR

Amid Craft Brewery Boom, Some Worry About A Bubble — But Most Just Fear Foam

Fueled by customers' unquenchable thirst for the next great flavor note, the craft beer industry has exploded like a poorly fermented bottle of home brew.
WAMU 88.5

The Politics Hour - July 1, 2016

Kojo and Tom Sherwood chat with D.C. Transportation Director Leif Dormsjo and Virginia Del. Marcus Simon (D-Fairfax).

NPR

After Deadly Crash, Safety Officials Will Examine Tesla's Autopilot Mode

The fatal crash of a Model S that was in autopilot when it collided with a truck in Florida is prompting a preliminary evaluation of the feature by the National Highway Transportation Safety Board.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.