Sir, – The second Greek bailout provides a template to understand the ECB’s position in the promissory note debate. Unfortunately it is not encouraging from an Irish perspective.
While holders of Greek sovereign bonds are being asked to accept a hit, bond holders in Greek banks are to be paid in full. The Greek banking sector has been rendered bankrupt by the write-down of its sovereign debt holdings. It is to be re-capitalised by equity provided by the Greek government, funded by €23 billion of Troika loans. So liability for Greek bank insolvency will ultimately fall on the Greek taxpayer and not the Greek bank creditors. Sound familiar? – Yours, etc,