Greece, creditors edge closer to deal

Thu Jan 26, 2012 6:11pm EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By George Georgiopoulos and Lefteris Papadimas

ATHENS (Reuters) - Greece and its private creditors made progress on Thursday in talks on restructuring its debt, both sides said, and they will continue negotiating on Friday with the aim of sealing an agreement within a few days.

Athens needs a deal quickly to avert a chaotic default when a major bond redemption comes due in March. Greece's creditors are demanding that the European Central Bank contribute to a deal to put the country's messy finances back on track.

"The talks focused on legal and technical issues and progress was made. They will continue on Friday and probably on Saturday too," a senior Greek government official told Reuters on condition of anonymity.

"We aim to conclude the deal very soon."

The Institute of International Finance, which leads talks on behalf of creditors, similarly cited progress and said work would continue Friday. Neither side disclosed any details.

After weeks of wrangling over the coupon, or interest rate, Greece must pay on new bonds it will swap for existing debt, attention has shifted to whether the ECB and other public creditors will follow private bondholders in swallowing losses.

A day after International Monetary Fund chief Christine Lagarde said the ECB may need to accept losses on its Greek holdings, the European Union's top economic official also warned more public money will be needed to make up a shortfall in the country's second bailout.

EU Economic and Monetary Affairs Commissioner Olli Rehn told Reuters "there is likely to be some increased need of official sector funding, but not anything dramatic." It was the first time a top EU official had said more public money than a planned 130 billion euro package would be required to rescue Greece.   Continued...