General Discussion
In reply to the discussion: Greek Prime Minister Warns of Societal Collapse Like Weimar Germany; Citizens Storm Defense Ministry [View all]dipsydoodle
(42,239 posts)Earlier financial instruments were unsecured in that way inasmuch they covered by Greek Law. As far as I'm aware all transactions , some of which were used to settle earlier debt are now secured. In the absense of that being so I doubt they would have accessed further funds and would already be down the tubes.
English law set to rule new Greek bonds. 15 Jan 2012
The request from our creditors that the new bonds be governed by English law has not been accepted, Prime Minister Lucas Papademos declared on December 2, speaking to the parliament. A month later, tough negotiations on the private sector involvement (PSI) deal are reportedly forcing the Greek government to cross this red line and accept the issuance of the new bonds under English law, satisfying a key bondholder demand and depriving Greece of a great advantage over its creditors.
Lee Buchheit, a partner at international law firm Cleary Gottlieb Steen & Hamilton that acts as an advisor to the Greek government on the PSI, had written a few months ago that by far the greatest advantage that Greece would enjoy in a restructuring of its debt derives from the fact that so much of the debt stock is expressly governed by Greek law (90 percent or more).
In a paper entitled Greek debt: The endgame scenarios, Buchheit, one of the most prominent lawyers globally in debt restructuring cases, said that that the restructuring could be facilitated in some way by a change to Greek law.
If English law is applied to the new bonds issued under the complex PSI, the Greek side would have to face the following consequences:
Property confiscation: According to international law as well as many national legal systems, when a property is located within the jurisdiction of the legislating state, the latter has the power (de facto or by law) to nationalise or transfer property without compensation. The Wall Street Journal reported on January 5 that Greece has agreed to consider that the new bonds be governed by English law, which means creditors would be allowed to seize Greek assets if the country fails on its payments.
http://www.athensnews.gr/issue/13478/52264
The outcome was that the debt was made subject to "English Law" if not satisfied may eventually have the resultant effect of privatising their public utilities. .