Mixed mood on Greek progress

Following a historic debt swap action by banks to keep Greece afloat and enable Athens to move a big step closer to a second bailout, analysts around the world have reacted with relief and cautious optimism. But they agree that the path from the brink of default will remain bumpy.

"The banks' voluntary expropriation is by and large in the bag," Commerzbank analyst Lutz Karpowitz told Reuters news agency on Friday.

"All in all, markets have reacted positively to the news, and another hurdle on the way to the next 130-billion-euro ($172 billion) bailout package for Greece was successfully taken," Karpowitz added.

Athens now intends to activate so-called collection action clauses (CACs) in a bid to force holdouts to also join the deal. This, in turn, may trigger anti-default insurance contracts known as credit default swaps (CDSs) and whose value has been estimated at 3.2 billion euros.

Trouble ahead?

The International Swaps and Derivatives Association (ISDA) was to decide on Friday whether the Greek debt cut constituted a "credit event" and as such would trigger CDSs.

"There's still a lot of uncertainty about the technical details," said Sumino Kamei from Tokyo-Mitsubishi UFJ. "We don't know much about the timing of the collection action clauses, nor what will happen with the CDs, and this could be a burden on the euro," Kamei argued.

"Each billion is important for Greece to get a decent haircut deal," said Ulrike Kastens, an analyst with Sal. Oppenheim. "But we shouldn't have any illusions. Greece will continue to have difficulties to comply with EU and IMF requirements, and I personally believe that there will be a third bailout package," Kastens warned.

She added that more emphasis must be put on supporting growth in Greece as the only sustainable way of getting the country on its feet again.

hg/gb  (dpa, AFP, Reuters)