Greek debt deal near, bigger haircut: BNP Paribas chief

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A deal on writing down privately-held Greek debt is very close, the head of France's BNP Paribas Bank said Friday, with investors set to accept losses higher than the initially agreed 50 percent.

"We are now very close to accord," BNP Paribas chief executive Baudouin Prot said on BFM radio, adding that it was "essential that these discussions wrap up in the coming days."

A group representing private creditors agreed with eurozone leaders at a European Union summit in Brussels in October to negotiate a deal to erase up to half the face value of the Greek government bonds debt they hold so as to reduce the country's debt by some 100 billion euros ($130 billion).

Prot confirmed that the deal currently on the table would see investors accept higher losses, or so-called haircut, on their investment.

"The effort being demanded of (private) creditors is somewhat higher than 50 percent," said Prot, whose advisor Jean Lemierre has been temporarily detached from the bank to help the Institute of International Finance, which represents more than 450 financial institutions worldwide and is negotiating with Greece on behalf of private creditors.

Prot said a successful debt deal could be "one of the factors, at the beginning of this year, to improve the outlook for the eurozone."

He estimated that in the case of a deal, an exchange of old bonds for new ones would take a month.

The result of the negotiations will be a key determining factor for the eurozone countries and the International Monetary Fund on possible further assistance to the debt-wracked eurozone country.

Athens is waiting on a second rescue agreed in October, in addition to the 110-billion-euro programme it was awarded by the EU and IMF in May 2010.

© 2012 AFP

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