Greece In Tough Talks On Bond Swap


Salon Staff
January 13, 2012 5:45PM (UTC)

ATHENS, Greece (AP) — Greece's government was locked in a second day of tough negotiations Friday with private bondholders on a crucial debt relief deal, with global banking representatives warning that time for reaching an agreement is running out.

The private debt deal is a key part of Greece's second international bailout, worth a total euro130 billion ($166 billion), without which the country could suffer a catastrophic bankruptcy that would send shockwaves through the global economy. The bailout tops a euro110 billion program agreed in May 2010 to keep the country solvent after its borrowing costs soared to untenable heights.

Advertisement:

Prime Minister Lucas Papademos and Finance Minister Evangelos Venizelos were meeting Charles Dallara and Jean Lemierre of global banking body the Institute of International Finance to discuss the deal, a day after finance ministry officials from the eurozone met in Brussels.

While a senior Greek finance ministry official was cautiously optimistic Thursday night and said a deal could be struck by the end of next week, it appeared key difficulties remained unresolved.

A person close to the talks said Friday afternoon that the negotiations were "very, very tense."

Advertisement:

Both spoke on condition of anonymity to discuss highly sensitive negotiations.

Greece is rushing to reach a deal on the bond swap that would reduce its debt by euro100 billion ($127 billion) — roughly half its privately held debt burden — ahead of a major euro14.5 billion bond redemption in late March. Without the deal, and funding from its second bailout, the country faces a messy default.


Salon Staff

MORE FROM Salon Staff



Fearless journalism
in your inbox every day

Sign up for our free newsletter

• • •