Greece is on the edge. Part of their bail out, the voluntary losses Greek bond holders were supposed to accept, is falling short.

Private holders of €206bn in Greek bonds have until Thursday evening to decide whether to take part in a swap where they would trade bonds for a package of bonds and cash that would knock about €100bn off Athens’ debts.

Greece must get 75 per cent of holders to participate to avoid forcing the deal on holdouts through so-called “collective action clauses” which were inserted retroactively into Greek bonds by the government last week. If less than 66 per cent participate, even the CACs would become invalid, scuppering the entire deal.

The ECB is already saying voluntary participation will be too low and now there is talk of forcing the holders of Greek debt to take their haircut:

Greece expects bondholders to accept a one-time offer to write off about 100 billion euros ($140 billion) of Greek debt and is ready to force them to participate if necessary, Finance Minister Evangelos Venizelos said.