Euro zone central banks may roll over their Greek bonds: document

Wed Nov 28, 2012 6:33am EST
 
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By Jan Strupczewski

BRUSSELS (Reuters) - Euro zone central banks may decide to roll over their holdings of Greek debt to reduce by 5.6 billion euros the amount governments will need to provide Athens by 2016, according to an document obtained by Reuters.

Such a move would cut the amount to 2 billion euros from 7.6 billion, the document, which emerged from this week's euro zone finance minister's meeting, showed.

International lenders -- euro zone countries, the European Central Bank and the International Monetary Fund -- agreed early on Tuesday on a debt reduction plan for Athens that would bring Greek debt to 110 percent of GDP in 2022.

This would be down from almost 190 percent expected for next year.

According to the document, Greece would need to get 1.8 billion euros in extra financing in 2012-2014 and another 5.8 billion between 2015 and 2016 -- a total of 7.6 billion.

But it floated the idea that if the euro zone's 17 national central banks, which together form the Eurosystem, decide to replace the Greek bonds they hold with new Greek paper as the debt matures, it would save Greece the need to redeem 3.7 billion euros in 2012-2014 and 1.9 billion euros in 2015-2016.

It lists the item of "roll-over of ANFA holdings" -- a term to describe central banks' investment portfolios -- in parenthesis, suggesting it has yet to be agreed or in any way formalized.

Furthermore, it notes that the amounts mentioned are tentative and subject to approval by national central banks.   Continued...

 
A Greek flag flutters at the Acropolis hill in Athens November 27, 2012. REUTERS/John Kolesidis