Thursday, January 19, 2012

Greece, creditors talk to avoid default

Greek Prime Minister Lucas Papademos (file photo). The premier joined the Wednesday talks with the international creditors in an attempt to avoid a default by the country.

Source: Press TV

Greece and its international creditors have started a new round of talks to avoid a default by the country, with both sides under increasing pressure to work out their differences.

The two sides said little on Wednesday after an over-two-hour-long meeting except that they would meet again on Thursday. Greece has to strike a deal within days to avoid defaulting on the debt when bond redemptions, equaling EUR 14.5 billion (USD 18.5 billion), are due in late March.

Greece's debt stands at EUR 340 billion (USD 440 billion) -- a sum, which equals around EUR 31,000 debt per person in the country of 11 million people. The country has the highest debt burden in proportion to the size of its economy in the entire 17-nation eurozone.

Investors fear a default could mess with the international financial equation and send the global economy into recession.

Greek officials and international bankers have expressed optimism that a deal could be reached in the coming days, despite the fact that talks broke down last week over the issue of the interest rate Greece will offer on new bonds and a plan to enforce investor losses.

An agreement with banks and other institutional investors would open the door to a funding deal from the International Monetary Fund and European lenders and help stabilize the markets within the eurozone.

"They are working hard to breach differences and they will continue tomorrow," said a source close to the talks.

Greece's Prime Minister Lucas Papademos, the country's Finance Minister Evangelos Venizelos, and Charles Dallara, the head of Washington's International Institute of Finance, who is also representing private money lenders at the talks, discussed both the issues.

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