Bondholders warn of nationalisation risk

Eurozone banks are raising the threat of being nationalised in an effort to fend off suffering losses of up to 50 per cent on their Greek bonds should the terms of Greece’s bail-out be redrawn. The FT cites people close to holders of Greek debt who said a compromise of a reduction of 35-40 per cent of net present value was possible, but they warned that increasing the proposed “haircut”, or losses, on the bonds to 50 per cent could force eurozone governments to take stakes in a number of institutions. Separately, FT says its own research indicated that the amount of financial pain Greeks faced on a per capita basis as a result of austerity measures were twice as severe as those in Portugal and Ireland and nearly three times that of Spain, underlying concerns about the Greek programme’s impact on the country’s economy. Meanwhile, Portugese trade unions called for a general strike in November.