Last spring it was PMI- private sector involvement. In other words, private investors facing reality that their investments in Greek debt were worth only pennies on the euro.
This fall we have a new term to learn: OSI- official sector involvement. That would mean European governments and the IMF taking pennies on the euro for their holdings of Greek debt. OSI is verboten as it would amount to a violation of the “no bailout clause” of the Maastricht Treaty ( the founding document of the euro zone).
The idea of a “no bailout clause” seems a rather quaint one given the serial bailouts in the euro zone in the last three years, but whatev…
On the wires, Italy’s Grilli says the idea of OSI is not an appealing idea to any country that is a net lender to Greece.
It may not be an appealing idea but if they don’t do it, we’ll be back in another 6 months for another round of fresh funding…
