Fears that Greece could default on its massive debts are mounting after eurozone finance ministers in Brussels rejected an offer from the country’s private creditors late on Monday night. Despite that, the Greek finance minister Evangelos Venizelos said he was confident an agreement would be reached.
“We have the green light of the eurogroup to close the deal with the private sector in the next few days,” Venizelos said.
But bond holders and banks are so far refusing to take a bigger hit on their toxic investments. There also appears increasing frustration with the Greek authorities.
Swedish Finance Minister Anders Borg told reporters:
“So far they have been given so many chances, and we have seen so little delivery, so there must be some kind of major overhaul when it comes to Greece.”
Ministers are pushing investors to swap existing Greek government bonds for new longer-term ones and have told the banks they must accept a lower interest rate.
Agreement is necessary for Athens to receive the next round of bailout money it needs. Without the cash, Greece will not be able to make billions of euros in loan repayments scheduled for March.
Reporting from Brussels euronews’ Raquel Garcia Alvarez said: “It’s the first Ecofin of 2012. If last year the aim was to contain the crisis, this year started with the clear plan to solve it and give impetus to growth. Now, the European Council must find a way of coming to a deal on these two issues.’‘