Apr 3
Eurozone Private Sector Role aimed at Greek Debt Agreement
Thursday, 09 June 2011 07:33

greece-thumbsdownEuro zone on Wednesday edged closer to compromise on the bailout package in which both Greek private creditors will be asked to swap ownership of their government debt for bonds with longer durations.

Some bankers euro zone, including the head of the French Credit Agricole, said they would support the extension of maturity, a move that will not reduce the debt burden of the Greeks, but it can give more time to meet fiscal targets and avoid harsh restructuring.

European Central Bank, which has been arguing against all forms of debt restructuring, may also heat up the idea of ​​private sector involvement if the main deductions Greece's debt - a "piece" - can be avoided.

Greece received € 110 billion aid for saving the deal a year ago, but has failed to restore confidence in financial and a new package is being proclaimed that can reach a total of 80-100 billion euros to cover the funding needs of Athens until 2014.

Whether and how to involve the banks, hedge funds and other private shareholders in the Greek debt in the new package has been hotly debated for weeks, with some officials worried the move could let go of transmission that surrounds new countries such as Spain, with catastrophic consequences for the currency bloc.