European finance chiefs push Greece’s private creditors to take bigger losses on bonds

Page last updated at 10:37 GMT, Monday, January 23, 2012 - 15:37 EST

Washington Post:

Greek Finance Minister Evangelos Venizelos, left, speaks with Luxembourg’s Prime Minister Jean-Claude Juncker

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European finance ministers piled the pressure on Greece’s private creditors Monday to reach an agreement with Athens to cut the country’s massive debt load, with the Dutch representative warning bondholders that they may be forced to take losses.

Time is running out for Greece to reduce its debt by some €100 billion ($129 billion) and avoid missing a vital bond repayment deadline. Talks between the country and representatives of banks and other investment firms to secure a deal hit an impasse over the weekend.

The deal would involve private creditors swapping their old Greek bonds for ones with a 50 percent lower face value. The new, lower priced bonds, would also have much longer maturities — pushing repayments decades into the future — and will pay a much lower interest rate than Greece would currently have to pay on the market.

It’s clear that Greece needs some form of deal soon — it faces a €14.5 billion ($19 billion) bond repayment on March 20, which it will be unable to afford if the bond swap doesn’t go through.

Read the whole story: Washington Post