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The negotiations of the Greek government with private creditors on the 50-percent haircut on Greek debt are over. The last details on the exchange of old Greek bonds with new ones of 50% lower net present value were specified at a meeting of Prime Minister Lucas Papademos and Minister of Finance Evangelos Venizelos with the Executive Director of the Institute of International Finance Charles Dallara and the president of Deutsche Bank Josef Ackermann late yesterday evening. Today, Charles Dallara will leave for Paris, where he will hold a series of meetings with Greece's private creditors to inform them of the agreement. Private creditors hold 206 billion euro in Greek debt and through PSI +, they will write off 100 billion of this debt.
    According to the information known so far, private creditors of Greece will exchange the old bonds for new ones and their nominal value will be 35% of the nominal value of old bonds. The other 15% they will receive in cash. The new bonds will have a 30-year maturity and their average interest rate varies between 3.6 and 3.75% - significantly below the 4.8% creditors required at first. The final offer of the Greek government to them will be announced on Monday, 13 February or not later than Wednesday, 15 February. They will have two weeks to the end of February to decide whether to voluntarily be involved in the PSI +.
    If voluntary involvement is over 50% but well below 100%, the Greek government will legally apply the collective action clause CACs and will require all creditors to be involved in the programme. The regulation to trigger the clause is currently being prepared and it will come to a vote in Parliament by the end of the week. It will not be triggered before the beginning of March when it will be clear how many of the private creditors will involve voluntarily in the programme. After the announcement of the official PSI + proposal early next week, representatives of Athens will launch a roadshow around the world financial capitals to present to creditors the benefits of voluntary involvement in the programme. Prime Minister Lucas Papademos himself will not participate in it, as he told foreign correspondents in Athens ten days ago.
    "As we argued for a while Greece is likely to use ex-post CACs via domestic legislation to cram down PSI deal on holdouts. This will trigger CDS", stated the famous economist Nouriel Roubini on Twitter.
     The agreement with private creditors was set as a condition to Athens in order for the country to receive the second bailout of 130 billion euro. Prime Minister Lucas Papademos met last night with the representatives of the supervisory Troika Poul Thomsen, Klaus Mazuch and Matthias Morse too to inform them of the outcome of the negotiations with private creditors. Most likely, Eurogroup will meet on Friday and the Minister of Finance Evangelos Venizelos will inform his eurozone counterparts about the agreement there.
    Meanwhile, the statistical data for the state of the Greek economy in January 2012 has been released. State budget revenues fell by 7% instead of the expected growth of 9%. The disappointing data again made economists question the ability of Greek society to reform quickly to improve its competitiveness. As Goldman Sachs analyst Hugo Scott-Gall recalled, "the competitive advantage of innovation is one that developed markets need to keep." Economists recall that while there is zero innovation in Greece and its entrepreneurs cannot escape from the O-shaped triangle Ouzo - Olive Oil – Olympics, the chances for economic growth will be minimal.