European finance ministers will try on Monday, Jan 23, to give new momentum to talks on a Greek debt relief deal that is crucial to avoid a default but remains elusive due to disagreements with the country's private creditors, AP reports.
Talks to have the private creditors take about euro100 billion ($129 billion) in losses on their bonds have yet to reach an agreement, but a deal is necessary to avoid a default this spring. The creditors would get new bonds of a lower value and interest rate in exchange for existing ones.
The French and German finance ministers, Francois Baroin and Wolfgang Schaeuble, were holding talks in Paris before a meeting with their eurozone counterparts later in the day in Brussels.
Germany, which is heavily involved in the talks because it pays for most of Greece's bailout, is leading a push for the new bonds to pay lower rates than the creditors are currently willing to accept.
Greek officials say negotiations on the private debt writedown are continuing over the phone, while no appointment has been set yet for new face-to-face talks this week.
Debt inspectors from the EU, the European Central Bank and the International Monetary Fund – collectively known as the troika – will be meeting government officials in Athens this week on the course of the austerity program. Without approval from the troika, Greece will be cut off from its rescue loan lifeline, which would force it into a messy default on its debts in late March and – most likely – abandon the euro.
