Greece launches $13 billion bond buyback program

Greece announced Monday a $13 billion buyback program for private holders of Greek bonds to reduce the country's crippling debt.

The debt-ridden country will purchase bonds in a Dutch action, wherein prices start high and decline until the buying is completed, expected to happen by Dec. 17, the Associated Press reported. 

The Guardian explained:

"Investors will be offered the chance to swap their Greek bonds for a maximum price of between 40.1 percent and 32.2 percent of their face value (depending on their maturity)." 

The Bank of Greece, as part of its Interim Report on Monetary Policy 2012, said new measures Greece was taking, which include the bond buyback program, are "positive developments, which create plausible expectations of a recovery of the Greek economy, perhaps even earlier than projected at present."

However, the bank cautioned, "This outcome, however, hinges upon a consistent implementation of all the measures legislated, together with policies that will speed up the onset of recovery, including a broader program of structural reforms."

The report added, "Any delays will push the recovery back, with consequences that will be far more severe than anything that has so far happened."

The buyback is part of a tentative agreement between the European Union, the International Monetary Fund and Greece to release to $51 billion in desperately needed bailout funds.

The New York Times said the buyback plan will cut about 20 billion euros off of Greece's debt.