MELISSA BLOCK, HOST:
From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.
ROBERT SIEGEL, HOST:
And I'm Robert Siegel.
There is a small bit of good news out of Greece today. The country is getting a massive write-down on its debt. Private bondholders will take big losses and some bondholders who purchased insurance-like protection against a Greek default will avoid the worst. European leaders lauded the deal. It's known as a bond swap. But the real challenge remains: turning around the devastated Greek economy.
Joanna Kakissis reports.
(SOUNDBITE OF A NEWSCAST)
JOANNA KAKISSIS, BYLINE: For the first time in a long time, success was the news of the day. TV reports showed smiling politicians in Athens and Brussels saying the bond swap would put the country on a path to solvency.
Finance Minister Evangelos Venizelos said it would give the country a second chance.
DR. EVANGELOS VENIZELOS: (Foreign language spoken)
KAKISSIS: We're very satisfied with the exceptional success of this deal, he said, as well as the broad participation in it.
The government said nearly 86 percent of private creditors, holding more than $234 billion in Greek bonds, agreed to participate in the swap. The deal involved exchanging old bonds for new ones with lower interest rates and longer maturities.
It was, says economist Platon Tinios...
DR. PLATON TINIOS: A Herculean task to get them to agree in a coordinated way by a very strict deadline. So I think by any standards it is a negotiating triumph.
KAKISSIS: But Greece also forced a few bondholders to accept the terms of the deal and take 75 percent losses on their returns. The government did so by passing a law invoking something called collective action clauses, or CACs, says Paul McNamara, investment director at GAM in London.
DR. PAUL MCNAMARA: The general perception is that Greece could clearly not pay the debts that it had. And the CACs are as a close to a fair mechanism for ensuring a relatively smooth restructuring of Greek debt as it was realistically possible to expect.
KAKISSIS: European Commission Vice President Olli Rehn praised the deal and said it would help sustain Greek public debt. But economists say Greece can only do that in the long-term by making major changes to jumpstart its economy.
Economist Tinios says Greeks must choose leaders in upcoming elections that won't shy away from painful reforms.
TINIOS: I think it will be very important to show the world that these elections will be used as a way of strengthening the resolve of meeting the problems, rather than an escape clause.
KAKISSIS: For NPR News, I'm Joanna Kakissis in Athens. Transcript provided by NPR, Copyright NPR.