Greece’s next government may hold a trump card worth more than $510 billion if it heeds voters’ demands to renegotiate its bailout with the European Union.
The nation owes about 400 billion euros ($517 billion) to private bondholders, public bodies such as the International Monetary Fund and European Central Bank and other creditors, according to data compiled by Bloomberg. About 252 billion euros of that’s due to official organizations that used their status to avoid the losses suffered by ordinary bondholders when Greece restructured its debt two months ago.
Greek voters are demanding their leaders renegotiate the terms of rescue packages that have imposed unprecedented austerity on the country since 2010.[...]
The ECB also stands to lose much if Greece walks away from its obligations. First, the central bank bought about 50 billion euros of the government’s bonds to push down yields and help the nation retain access to the capital markets. [...]
The Athens-based central bank has also issued 18 billion euros more banknotes than the size of its economy would indicate as Greeks tuck bills under their mattress or spirit them out of the country, Whittaker said. That would bring Greece’s total liability to the ECB to 172 billion euros.
The ECB “would have to do a capital call on the rest of the members if there was a default,” said Darren Williams, chief European economist at AllianceBernstein Holding LP in London, which manages about $420 billion. “It would be a meaningful hit. So, yes, the Greeks do have some leverage.”