Finance chiefs to hold crunch talks as Greek deal emerges
Bond payment total that the Greek government must pay on March 20
FINANCE Minister Michael Noonan will join colleagues from the eurozone in Brussels this evening for an emergency meeting as the Greek government pushes to finalise the terms of a rescue.
The ministers will be joined by International Monetary Fund chief Christine Lagarde after Luxembourg Prime Minister Jean-Claude Juncker called the meeting late yesterday.
That gathering will follow today's monthly meeting of the European Central Bank's governing council in Frankfurt and an assembly of Greek creditors in Paris.
While no information was provided about the ministers' agenda, the scheduling suggests policy makers, who have to ratify a Greek accord, were optimistic about negotiators reaching an agreement in Athens.
The euro erased losses against the dollar yesterday after the meeting was announced.
"We look forward to a successful outcome of that meeting," said Amadeu Altafaj, the European Commission's economic-affairs spokesman. "The ball is in the Greek authorities' court."
Greek Prime Minister Lucas Papademos was locked in talks yesterday with leaders of the political parties supporting his caretaker government.
The rescue is slated to include a 50pc cut in the face value of more than €200bn of Greek debt through a voluntary exchange by private creditors of outstanding bonds for new securities. The package is also supposed to offer €130bn in public aid.
Mr Papademos met with the domestic political chiefs after delaying the gathering for two days as Greek officials and international creditors fought over terms. He held an unscheduled meeting late last night with the European Commission, the ECB and the IMF to put final touches on the rescue plan.
Tuesday's delay was yet another hitch in completing a package that has been in the works since last July. The Greek government, facing a €14.5bn bond payment on March 20, is struggling to arrange financing to avert a collapse of the economy.
Germany's deputy finance minister, Thomas Steffen, said yesterday that the eurozone has made unsatisfactory progress over the past two years in getting Greece out of its doldrums.
"I believe we can say today that we have made little progress on Greece since 2010, worryingly little progress," he said.
Greece will likely fail to achieve sustainable debt levels if it only resorts to a 70pc reduction in the value of bonds held by private creditors, Standard & Poor's warned yesterday, putting pressure on the ECB to also take losses.
Private-sector bondholders currently account for only a small part of Greece's creditors since most of the country's debt has migrated to the hands of the ECB and other official institutions, S&P analyst Frank Gill said.
Though pressure on the ECB to take losses on its holdings is rising, policymakers remain divided on what contribution the bank could make to the debt restructuring, two eurozone monetary policy sources said. (Bloomberg and Reuters)