The Greek government has said it has secured enough backing from private creditors to avoid a chaotic default on its debt.
The Finance Ministry says holders of 85.8 per cent of debt subject to Greek law have accepted its bond swap offer. Athens needed at least 75 per cent backing to get the deal through.
Under the plan, which will help release 130 billion euros in bailout funds, investors will be forced to take losses of up to 74 per cent.
“This recapitalisation will be significant and will be necessary so as to allow the Greek banking system to extend credit again to the real economy,” said Plato Monokroussos of Eurobank EFG.
The plan paves the way for a second bailout from the EU, IMF and European Central Bank.
New unemployment figures show Greece’s jobless total reached a record 21 per cent in December.
Severe budget cuts have caused a wave of business closures and bankruptcies.
Greece’s problems are so severe, it has no credibility to raise money directly from the international financial markets.
So analysts say the bond swap is the only way Athens can stave off a default.