In the wake of
the agreement whereby private holders of Greek debt would swap the bonds and
take a 75% loss, two or three percent of the private holders—namely,
well-financed hedge funds including Aurelius Capital and Elliott
Associates—were thought to be mulling over holding out for full pay-outs
instead of agreeing to take the loss. Greece’s dilemma would have been to pay
them in full in order to avoid a default and face the ire of the holders who
took the losses, or risk default by invoking a collective bargaining law to
force the holdouts to swap their bonds.
The full essay is in Essays on the E.U. Political Economy, available in print and as an ebook at Amazon.