Greek Prime Minister, Mr Lucas Papademos, entered fresh talks with negotiators for private investors yesterday night, seeking a bigger write-down than so far agreed, euro zone governmental sources said.
After months of acrimonious debate, euro zone ministers and the IMF were locked in closed-door talks seeking to close a combined €230-billion ($300 billion) bailout for Greece — but without increasing the volume of loans from public purses.
Under the terms of an October agreement between euro zone leaders, the write-down was to chop €100 billion from Greece’s €350-billion total debts.
Sweeteners for Greek banks worth €30 billion, plus further guarantees to underwrite a bond swap the euro zone wants to launch formally on Wednesday, are also needed to reach the remaining €130 billion.
Athens faces debt repayments of about €14.5 billion on March 20, otherwise it could be classed as bankrupt. Hardliners in the euro zone insist the final deal must stick to the October arrangement.
That is a problem because an analysis of Greek debt dynamics produced by the EU and the IMF shows that with the country into a fifth year of recession, another €5.5 billion must be found to ensure Greek debt falls from around 160 percent of GDP to 120 per cent of output by 2020.
On entering the talks, the Austrian Finance Minister, Ms Maria Fekter, said that the private sector could be asked to “help a bit more’’.
A Greek finance ministry source had said shortly beforehand that Mr Venizelos was holding a “parallel negotiation” with the International Institute of Finance (IIF), including the chairman and Deutsche Bank chief, Mr Josef Ackermann.