Greek creditors hope to reach deal within weeks: IIF

17th November 2011, Comments 0 comments

Holders of Greek sovereign debt said Thursday they hope to reach a deal "within weeks" on the planned reduction in the value of their holdings and for the plan to be implemented in January.

"We hope to find common ground within a matter of weeks," the managing director of the Institute of International Finance, Charles Dallara, who is leading negotiations, told reporters here.

"We will move as promptly as circumstance allow (and) ... if everything moves smoothly," the deal could be implemented as early as January, Dallara said, following talks hosted by Deutsche Bank at its headquarters in Frankfurt.

Creditor banks and Greek officials are negotiating details of a complex overall rescue package brokered by the European Union last month for private sector institutions to accept a loss of about 50 percent and to help Greece roll over maturing bonds so the country can sustain its huge debt.

A creditor committee had been set up to negotiate on behalf of private sector institutions that hold a significant chunk of Greece's 350-billion-euro ($472 billion) debt mount.

That committee represented about 70-80 percent of the privately held Greek debt, Dallara said.

In Brussels last month, the banks agreed to accept a nominal 50-percent writedown on their holdings of Greek debt as part of a second European bailout deal, which also gives Athens 100 billion euros in loans and 30 billion euros to recapitalise its banks.

Dallara refused to reveal any details about the possible options on the table but insisted "we are making progress in shaping our ideas.

"|In order to move quickly we would hope to concentrate on a more limited number of options ... one, maybe two solutions," he said.

Dallara said the continued support of the European Central Bank would be crucial if the plan is to succeed and all parties involved would need to make "sacrifices" going forward.

The ECB has "stood tall when it needed to and it will need to stand tall in the coming months," he said.

Dallara said the IIF was "quite encouraged" by the installation of a new government in Greece, which has created "a new sense of direction and momentum."

He insisted Greece is "unique" and that there is "no concern that the medicine applied to Greece will be applied anywhere else in Europe."

© 2011 AFP

0 Comments To This Article