he Royal Bank of Scotland, Barclays and HSBC joined 30 European banks and institutions in declaring their acceptance of the deal - but the tally was still far short of the 95pc needed to avoid being officially declared in default.
The International Institute of Finance (IIF), the body that has negotiated with the Greek government on behalf of bondholders, put out several announcements on Wednesday, counting the proportion of the vote as it inched up. The latest statement said bondholders “amounting in aggregate to €84bn, or 40.8pc of the €206bn total eligible debt” would support the deal.
The regular updates coincided with provocative comments from Germany’s finance minister, Wolfgang Schaeuble, who said he had discussed with Greece’s finance minister Evangelos Venizelos whether it would be better for the country to leave the euro.
Speaking at the European University Institute in Italy, Mr Schaeuble said he had discussed the issue “very openly” with Mr Venizelos.
“Maybe you could say it was the wrong decision for Greece to join the common European currency,” Mr Schaeuble said. “Greece has failed for a long time to deliver what is needed to be in a common currency.”
Creditors have until 8pm GMT on Thursday to agree to a €206bn bond restructuring - the biggest ever attempted. A total of 95pc of bondholders must accept the deal - agreeing to take losses of about 75pc - for it to count as “voluntary”.
Analysts said the hurdle is too high and Greece will have to resort to so-called Collective Action Clauses (CACs) to push though the deal. Athens has said it will activate the CACs, which will impose the deal on all bondholders, if between 66pc and 95pc accept the terms. Credit rating agencies have warned that the coercive nature of the CACs will constitute a default.
The International Swaps & Derivatives Association (ISDA), which determines if credit default insurance should be paid, is expected to reconvene if CACs are used.
Greece’s debt management agency has warned it “does not contemplate the availability of funds” to pay investors who refuse to vote for the deal. Even so, several Greek pension funds said they would not approve the debt swap.
Angela Merkel, the German Chancellor, said she was confident of a deal. Jan Kees de Jager, the Dutch finance minister, refused to call it. Analysts said markets were expecting a default. After Tuesday’s sell-off, European markets closed mostly flat on the day.
BNP Paribas’ Jean Lemierre said a Greek default would result in poverty in Greece and would be “extremely dangerous” for the rest of the eurozone. But Simon Denham of Capital Spreads argued that traders were prepared for the “worst case scenario” and the “creditors of Greece would rather see a substantial writedown of their assets in exchange for other interest bearing bonds as opposed to losing the whole lot”, he said.
Analysts at RBS warned that Athens would need a third bail-out “similar to the current one” in order to meet its funding needs up until 2020. Even so, Jose Manuel Barroso, the president of the European Commission, wrote a letter to Lucas Papademos, the Greek prime minister, outlining a six point plan to “stimulate growth and competitiveness” in the shattered country.
Meanwhile, Ms Merkel privately admitted a mounting concern about Portugal’s rising borrowing costs. Sources told Reuters that the German Chancellor had told a group of officials “the risk premiums on Portuguese bonds are a worry”.
Spanish and Italian 10-year bond yields rose - to 5.1pc and 5.2pc respectively - after analysts at the IIF said a disorderly Greek default would also probably require “support to Spain and Italy to stem contagion there”. Fresh data showed German industrial orders fell unexpectedly in January.
The Telegraph
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