Greek Government Starts Talks With Banks on Terms of Voluntary Debt Swap
Greece Starts Discussions on Voluntary Debt Swap With Banks
Kostas Tsironis/Bloomberg
Pedestrians look on as the Greek national flag flies from a flagpole in Athens.
Pedestrians look on as the Greek national flag flies from a flagpole in Athens. Photographer: Kostas Tsironis/Bloomberg
Nov. 17 (Bloomberg) -- Richard Corbett, adviser to European Council President Herman Van Rompuy, discusses the sovereign-debt crisis. He speaks from Brussels with Francine Lacqua on Bloomberg Television's "Countdown." (Source: Bloomberg)
Nov. 17 (Bloomberg) -- Grant Lewis, head of economic research at Daiwa Capital Markets, talks about the European Central Bank's role in backing indebted nations. He speaks from London with Andrea Catherwood on Bloomberg Television's "Last Word." (Source: Bloomberg)
Greec's Prime Minister Lucas Papademos
Kostas Tsironis/Bloomberg
Lucas Papademos, Greece's prime minister.
Lucas Papademos, Greece's prime minister. Photographer: Kostas Tsironis/Bloomberg
The Greek government started talks with banks on the terms of the voluntary debt swap that is part of the country’s international bailout agreement, the Finance Ministry in Athens said.
The debt swap -- part of a second rescue package for Greece -- aims to put the country on a path to cut its overall debt load to 120 percent of gross domestic product by 2020. The discussions in Athens are expected to take weeks to conclude, a European official said today on condition of anonymity.
Banks agreed to take a 50 percent writedown in the face value of their Greek debt holdings as part of the latest bailout for the country, a 130 billion-euro ($176 billion) package announced by European leaders on Oct. 27. The swap is intended to slice 100 billion euros off the nation’s debt burden of 355 billion euros.
Greek Prime MinisterLucas Papademos and Finance Minister Evangelos Venizelos held preliminary talks on the debt swap yesterday with Charles Dallara, the head of the Institute of International Finance. The IIF, which represents more than 450 financial companies, was scheduled to hold a press briefing at 4 p.m. today in Frankfurt.
The debt-swap “transaction will be designed to place Greece on a path to achieve a debt-to-GDP ratio of no more than 120 percent by 2020,” the Greek Finance Ministry said today in a statement.
Officials from the so-called troika -- the team from the European Commission, the International Monetary Fund and the European Central Bank monitoring Greece’s progress -- will attend the debt-swap talks as observers, the EU official said.
To contact the reporter on this story: Jim Brunsden in Brussels at jbrunsden@bloomberg.net
To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.
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