Brussels (MNI) – Efforts by Eurozone officials to prod banks to
take larger losses on their holdings of Greek government bonds have made
only limited progress, Charles Dallara, managing director of the
Institute of International Finance said Sunday.
Dallara, who is in Brussels negotiating on behalf of banks, said
in a statement that “discussions are making progress, albeit limited.”
Dallara added that, “we remain open to exploring options on a
voluntary approach built on a realistic outlook for the Greek economy
and restoration of Greece’s market access.”
The IIF, which represents the world’s largest banks, negotiated a
21% “haircut” for Greek government bonds at the July 21 summit. However,
events since then have made clear that without a much bigger
contribution from Greece’s private sector creditors, the amount of
public money injected by the European Union and International Monetary
Fund would need to be ratcheted sharply higher.
Based on a report issued by Greece’s official international lenders
on Friday, a 50% to 60% writedown would be required to make Greece’s
debt sustainable. If the writedown were left at July’s 21% level, the
public bailout money would need to be increased to a whopping E252
billion, compared with the E109 billion committed in July.
— Paris newsroom, +331-42-71-55-40; jduffy@marketnews.com
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