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IIF says creditors at limits of “voluntary” Greek deal January 22, 2012

Posted by proeconomia in Fiscal policy, Main, News on Greece, On the crisis.
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An update from Reuters, useful as it points at two things: first, there is a limit to where the PSI losses can go and second, and more important, E.U. has to concede (i.e. protect) Greece if it finds common ground with its private creditors. At least read this from the opening of the article (emphasis added):

 

“Athens needs a deal on the plan, that is meant to cut 100 billion euros from its debt burden of over 350 billion, in the coming days to avoid a messy default when a major debt redemption comes due in March. To achieve that, the Greek government needs to finalize talks with private bondholders, but it also needs the approval of the EU and the IMF, who insist the deal must cut its debt mountain enough to put it back on a sustainable track. After several rounds of talks from Wednesday to Friday, Greece and its private creditors are converging toward an agreement that would see private creditors accepting a real loss of 65 to 70 percent, sources close to the talks have said, while adding that many details are still unresolved. Athens and its creditors broadly agreed that under the so-called PSI deal, the new bonds would likely feature 30-year maturity and a progressive interest rate averaging out at 4 percent.”

 

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