TALKS BETWEEN THE Greek government and private creditors aimed at lightening the country’s debt load have been suspended unexpectedly, and the creditors’ representative has left the country.
Prime Minister Lucas Papademos, along with Finance Minister Evangelos Venizelos, had met with private creditors’ representative Charles Dallara, managing director of the Institute of International Finance, for over four hours Friday, with the talks continuing past midnight.
But the Greek government said the talks – which had been expected to continue today – have now been suspended. A spokesman for Papademos said no new date for the talks has been set.
Yesterday, a member of the creditor committee told Bloomberg that there had been “significant progress” in the talks, with “broad agreement” between the sides on key elements.
At issue is the interest rate in an eventual bond swap, which could lighten the country’s debt burden by as much as €100 billion. It’s thought Greece is hoping to negotiate a reduction of around 50 per cent on its private debt.
German chancellor Angela Merkel warned Greece this month that it will not receive further bailout payments from the EU if it does not impose losses on private bondholders.
She said ten days ago: “Debt restructuring has to be carried out quickly now because otherwise it won’t be possible to pay out the next tranche for Greece.”
- Additional reporting from AP
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