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Europe
Greek debt-reduction talks to continue
Chief negotiator for private creditors leaves Athens without a deal, but says talks on bond swap agreement are ongoing.
Last Modified: 23 Jan 2012 16:05
Al Jazeera's Tim Friend explains the significance of the Greek debt swap talks

Greek officials say talks on a crucial debt-reduction plan will continue even though the chief negotiator for the country's private creditors left Athens without a deal.

Charles Dallara, the representative of Greece's private creditors, said the talks would continue over the phone, despite his departure from the Greek capital on Saturday.

Dallara, the managing director of the Institute of International Finance, told the Associated Press news agency that he is "constantly talking by phone'' with Greek officials and that the talks are "coming together".

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He had met Lucas Papademos, Greece's prime minister, and Evangelos Venizelos, the finance minister, on Friday to iron out details of a bond swap deal that could would lighten Greece's debt burden.

But Dallara left Athens a day later for a "long-standing engagement'' in Paris, Frank Vogl, his spokesman, said.

Vogl said that IIF's legal and financial advisers are still in Athens working on several "outstanding issues'' with Greek officials and that Dallara will return to Athens "as needed".


Rescue package

Greece's leaders are seeking to persuade creditors to accept a deal that would see $100bn written off the country's national debt as part of a rescue package to save the faltering Greek economy from bankruptcy.

Greece is facing a renewed threat of defaulting on its debts, with $14.5bn repayment looming on March 20 and no available funds to cover that amount.

A default, Venizelos has said, would inevitably lead to Greece's exit from the 17-nation eurozone.

"Bankruptcy would, of course, mean our exit from the euro, because we would not be able to withstand staying in, being unable to finance our needs without a readjusted budget and producing primary surplus," he said.

Christine Lagarde, Managing Director of the International Monetary Fund said at a Berlin speech on Monday that several countries party to the 17-member eurozone "have no choice but to tighten finances tightly, sharply, and without compromising".

The bond-swap negotiations are part of a second bailout deal worth $130bn, agreed between Greece and eurozone countries in addition to $110bn in rescue loans since May 2010 from the eurozone and International Monetary Fund.

Senior members of the EU-IMF debt inspection team - known as the "troika" - are due in Athens on Friday to negotiate additional terms for the second bailout and monitor progress in Athens on its pledge to slash deficits though harsh austerity measures.

Source:
Al Jazeera and agencies
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