Friday, March 9, 2012

Greece to announce outcome of debt reduction talks

Greece is set to announce the outcome of debt-reduction talks with private sector investors on Friday.
Officials are asking holders of Greek government bonds to take a loss of more than 50 percent on the amount they are owed.The European Union and other organizations have offered Greece an additional bailout package of 130 billion euros, or over 170 billion dollars. Debt restructuring is one of the preconditions.

Greece aims to secure agreement from at least 75 percent of the bond holders. The bonds in question are worth over 200 billion euros. Failure to meet this target could impact the overall framework of the additional bailout.Even if 75 percent of the investors agree, Greece has indicated that it may force the remaining bond holders to accept the reductions.Observers are concerned that such an action could cause confusion among investors, and cast a shadow on the outlook for the European debt crisis.

International Monetary Fund spokesperson Gerry Rice said Greece is making "steady progress" on fiscal restructuring, another prerequisite for receiving additional aid.He says Greece is taking on a strong set of reforms. He also says although there are risks, the country can be put back on a growth path if all parties fulfill their roles.

The spokesperson said the IMF plans to hold a board meeting on Thursday next week to discuss the bailout. That'll be after it confirms the outcome of talks with private bond holders.

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