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Greece in last ditch scramble to avoid default

Greece is on the verge of completing the largest sovereign debt restructuring in history, but doubts remain over whether the stricken country can avoid a default.

Athens officials last night estimated more than 85pc of private creditors had accepted the €206bn (£173bn) bond swap shortly after a deadline expired yesterday evening. That is enough for the deal to go through, but leaves the possibility the government might have to use its controversial Collective Action Clauses (CACs).

Ratings agencies have warned they will declare a default if Greece activates the CACs, which allow the government to impose the deal on the remaining bondholders. The CACs will be used if the take-up falls below the desired 95pc but above the required 66pc.

The International Swaps and Derivatives Association (ISDA) is poised to convene again to decide if the deal amounts to a “credit event” that would trigger billions of euros of insurance.

Athens said the figures would be revealed at 6am GMT today. The 17 eurozone finance ministers have scheduled a conference call at lunchtime today to review the deal. They will meet on Monday to decide if Greece’s €130bn bail-out funds can now be released.

With the bondholder acceptance level too close to call yesterday, Evangelos Venizelos led the charge against a group of rebel Greek investors. The Greek finance minister said it was an embarrassment that six out of 15 state-controlled pension schemes – including one that serviced his own ministry – were withholding their support hours before the deadline. “When pension funds in other countries that invested in Greek bonds are taking a haircut, how can our own funds refuse to join in?” he said.