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The Supreme Administrative Court defines the PSI as legal

24 June 2013 / 21:06:32  GRReporter
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The Supreme Administrative Court has stated that the haircut of Greek government bonds held by individual persons is legal and does not violate the constitution.

Over seven thousand people, who had invested their personal savings in government bonds before the crisis, along with commercial and civil unions have filed a complaint in the superior court hoping that they would be able to return their lost funds. However, their expectations have not been fulfilled.

The official decision of the court will be announced on 17 September 2013 but the victims are determined to fight to the end. According to the Greek electronic portal capital.gr, the individual investors in government bonds will seek protection from the United Nations, referring to the violation of property rights established by the Convention on Human Rights.

In March 2012, Greece had announced that it would reduce its foreign debt by cutting the nominal value of government bonds that it had already launched in the market. Government and private financial institutions bought the majority of them but the banks offered a smaller part of them to ordinary investors as a safe investment.

After the debt haircut known as PSI (Private Sector Involvement), it turned out that not only the big investors, but also the citizens who had trusted the system and had bought government bonds suffered from this.

The majority of big investors were represented by the International Institute of Finance, which had signed a bilateral agreement on the value of the debt haircut. It had to be voluntary in order for it not to be taken as a suspension of payments and for the country to default. However, individual investors in government bonds had not signed such an agreement.

According to the union of individual investors in government bonds, the total loss to its members is 85% of the initial investment cost. They tried to prevent the loss with a series of actions but without success. An appeal to the Supreme Administrative Court followed but it has not been approved.

"From the beginning of the PSI to today, 14 suicides have been committed by union members who had lost their life savings", Ioannis Marinopoulous, chairman of the union, told Skai TV. He urges the authorities to withdraw the decision of the Bank of Greece and to exclude the Ministry of Finance and private investors in government bonds from the process, as was the case with the European Central Bank last year. The union of individual investors has announced a general meeting for 26 June, Wednesday, at which it will announce the next steps it is going to take.

Tags: EconomyBondsPSICrisisExterbal debt
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