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Piraeus Bank President Against Larger Haircut

Piraeus Bank President Michalis Sallas is against a large haircut of Greek bonds held by private creditors, according to a statement. 

Sallas believes that in case of a 50% haircut the benefit at the end of the day would be €10-15 billion, while it would only relate to Greek insurance and banking system. 

A haircut by 50% instead of 21% -agreed on July 21- would result in a reduction of Greek debt by €20-25 billion, not by €180 billion, as many people believe, said the banker. 

However, Greece should borrow again from the European countries and the IMF in order to strengthen its insurance funds and recapitalize the banks. Thus, Greece would benefit only €10-15 billion from a total debt of €360 billion at the end of the day, Sallas added. 

There has been a misinterpretation, as €60 billion bonds held by ECB, €65billion Troika loans, €20 billion treasury bills, €40-45 billion bonds and other loans are not included in the PSI program. 

Over 50% of participants in the program have been Greek banks, insurance companies and funds. Thus, the Greek state would be required to borrow again to support these institutions, said Piraeus President.
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