Haircut pulls Greece back from bankruptcy brink

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Haircut pulls Greece back from bankruptcy brink

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It is not every day that a trim can be described as a turning point.

But Greece’s haircut has made history hence talk of little else at one barber’s shop in Athens.

The haircut has shaved 105 billion euros from the country’s debt burden, thanks to a bond swap deal with its private creditors. It has also given Greece breathing space from the risk of imminent bankruptcy.

“The more you cut your hair the stronger it gets,” said hairdresser and salon owner Lia Gasparinatou, an expert in the field. “So, lets hope with the haircut of the bonds there will be growth.”

With the deal clearing the way for a badly-needed second international bailout for Greece, there is also optimism in the government.

In a televised address, Prime Minister Lucas Papademos said “With the completion of the biggest debt restructuring of all time, a window of hope and opportunity opens up for Greece.”

But is this Greek tragedy really about to come to an end? Not everyone is sure, like analyst Philippe Waechter of Natixis Asset Management in Paris.

“The situation in Greece for Greek citizens is going to remain extremely delicate and the question is whether, given the austerity plan, Greece will be able to cope with all these constraints,” he told euronews.

Hit by crippling pay and pension cuts and soaring unemployment, some Greeks say the deal is a sham that will simply force them to tighten their belts even further.