Communist party affiliated protesters block the entrance of the General Confederation of Professionals, Craftsmen and Merchants building in Athens on Wednesday, Jan. 18 2012. Greece's unions and employers are to start talks on reducing labors costs, but the negotiations were disrupted when protesters from a Communist-backed labor union occupied the central building where the meetings were to take place. The banners read " Hands off Labor Contracts" "Increases in Salaries and Pensions". (AP Photo/Kostas Tsironis)
Communist party affiliated protesters block the entrance of the General Confederation of Professionals, Craftsmen and Merchants building in Athens on Wednesday, Jan. 18 2012. Greece's unions and employers are to start talks on reducing labors costs, but the negotiations were disrupted when protesters from a Communist-backed labor union occupied the central building where the meetings were to take place. The banners read " Hands off Labor Contracts" "Increases in Salaries and Pensions". (AP Photo/Kostas Tsironis)
Communist party affiliated protesters block the entrance of the General Confederation of Professionals, Craftsmen and Merchants building in Athens on Wednesday, Jan. 18 2012. Greece's unions and employers are to start talks on reducing labors costs, but the negotiations were disrupted when protesters from a Communist-backed labor union occupied the central building where the meetings were to take place. (AP Photo/Kostas Tsironis)
Charles Dallara, the head of the Institute of International Finance, which represents Greece's private bondholders, leaves after his meeting with Prime Minister Lucas Papademos and finance Minister Evangelos Venizelos, in Athens, on Wednesday, Jan. 18, 2012. The Greek government resumed talks with its private creditors in Athens on Wednesday in the hope of sealing a debt relief deal needed to avoid a disastrous default this spring. (AP Photo/Kostas Tsironis)
ATHENS, Greece (AP) ? The Greek government resumed stalled talks with its private creditors in Athens on Wednesday in the hope of sealing a euro100 billion ($128 billion) debt relief deal needed to avoid a disastrous default this spring.
Charles Dallara, a top official at the Institute of International Finance, a global banking association, returned to Greece after negotiations stalled last week, and held a nearly three-hour meeting with Prime Minister Lucas Papademos and Finance Minister Evangelos Venizelos.
"A very crucial meeting, that lasted several hours, has just finished at the prime minister's office," Venizelos told Parliament shortly afterward. "The meetings between the Greek government and the IIF have resumed and they will continue (Thursday)."
Earlier, he said the talks "are without a doubt at a very sensitive stage."
The so-called private sector involvement, or PSI, deal is meant to write off half of the debt Greece owes private bondholders. Creditors would get most of the remaining debt in new bonds with extended repayment periods, as well as a cash payment.
"We want this (deal) to happen in a way that is safe for Greece ? with Greece in the eurozone ? and safe for the real economy and the financial system," Venizelos said.
Since May 2010, Greece has kept solvent with rescue loans from its European partners and the International Monetary Fund. In the event of bankruptcy, Greece would likely have to abandon the euro and revert to a devalued currency. Since the country imports more than it exports, the costs of fuel and basic consumer goods would skyrocket, further frustrating a population angered by two years of harsh austerity.
The PSI talks have mainly been held up by a disagreement on interest rates for the new bonds.
"The interest rate on the new loans is a key issue here," Dallara told CNN before Wednesday's meeting. "Some seem to have a view that we should actually extend the loans at interest rates even lower than what the IMF and (the Europeans) extend their loans at, and there's not much logic in that in our viewpoint."
Dallara urged the EU to make clear that a similar deal would not apply to other troubled eurozone countries. "Greece really is a unique situation," he said.
A Greek government official said Athens is still considering whether to impose so-called collective action clauses on its bonds. Such clauses could force private debt holders resisting a settlement to fall in line with the majority if an agreement is reached. The official asked not to be identified, citing the sensitive nature of the talks.
A second government official, who also spoke on condition of anonymity, said Athens estimates there could be an agreement by the end of the week.
Greece needs to clinch the deal quickly to qualify for more bailout loans before it faces a euro14.5 billion ($18.6 billion) bond repayment on March 20. The bond swap is a key part a new euro130 billion ($166 billion) bailout package in loans and bank support from international rescue creditors.
Recession-bound Greece needs to write off some of its borrowings, if it is to have a fighting chance of emerging from its debt hole.
It has so far relied on austerity measures, which were a condition for it to receive the emergency loans. The Greek government has cut pensions and salaries, raised taxes and sold some state property.
Yanis Varoufakis, a professor of economics at the University of Athens, argued that even with a debt deal Greece could do little to eventually avoid default.
"Let the truth be revealed. Let's have a default because Greece is insolvent and insolvent entities have to default. It's a law of nature and of society and of reason, and we should simply succumb to that," Varoufakis told AP Television.
"If European leaders are worried about the effect this will have on banks, they might as well recapitalize them, not continue to drip-feed the Greek state," he said.
Dallara, the Institute of International Finance official, said that if Greece is forced to default, it will be messy. "I personally believe that there is no such thing as an orderly default for Greece," he told CNN. "If there is a default, it is likely to be very disorderly."
As austerity measures have cut deeply into incomes and unemployment has risen, unions have held frequent strikes and protests over the past two years.
Unions and employers were to start talks on Wednesday on reducing labors costs, but the negotiations were disrupted when protesters from a Communist-backed labor union occupied the central building where the meetings were to take place.
EU-IMF debt inspectors are back in Athens this week to monitor progress of those reforms aimed at slashing the country's high budget deficits.
__
Derek Gatopoulos and Theodora Tongas in Athens contributed to this report.
Associated Pressgloria steinem fox news meteor shower tonight annie oakley edc paranormal activity 4 lovelace
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.