If Greece had not achieved its bond swap deal the eurozone’s financial system could have been destabilised and the euro undermined.
So vital was it to Greece’s financial future that the Athens government said it would use “collective action clauses” a legal means to enforce the deal on all holders of its outstanding debt that is regulated by Greek law.
Major banks and pension funds have supported the debt swap but when they trade in their bonds for new ones it means they will take losses of as much as 75 percent on the value of their investments.
With the deal Greece will get out of repaying over 100 billion euros of the money it borrowed.
The European Central Bank was exempt from participating in the bond swap. Bank President Mario Draghi defended that on Thursday saying it was in the “public interest”.
He added the ECB has a “duty to do everything to protect the taxpayers’ money that it was entrusted with.”
Draghi also said there is no ‘Plan B’ for Greece to leave the eurozone if the bond swap and second bailout fail.
He said: “To have a ‘Plan B’ means to admit defeat, and we don’t want to be defeated.”