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Brinkmanship over Greek debt deal continues

Brinkmanship over Greek debt deal continues
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European finance ministers — meeting in Brussels —have been pushing investors holding Greek government bonds to accept lower amounts as part of a debt swap.

Athens needs that debt swap to avoid a disorderly default that would cause chaos in the global financial system.

After the meeting European Commissioner for Economic Affairs Olli Rehn said: “The talks between the private creditors’ community and the Greek government have progressed well and they are very close to an agreement. It is certainly preferable to achieve an agreement in the coming days, preferable to do so in January, rather than in February.”

Greece’s top official at the Brussels meeting remained stoic, saying the country had the eurozone’s support to complete the debt swap talks in the “coming days”.

“In reality, we are now entering the final stretch,” Finance Minister Evangelos Venizelos said in a statement.

“I believe everyone has now realised that Greece must be supported in its effort, which is of vital importance not only for us but for the euro zone as a whole and the global economy.”

Athens has to reach a quick deal with its private bondholders otherwise it will not get the next instalment of a 130 billion euro EU and International Monetary Fund rescue plan.

Greece’s fast-deteriorating economic state means it will likely need even more aid.

The finance ministers also discussed coping with Europe’s economic slump. Rehn said: “The economic slowdown continues, and several factors point to a moderate recession — at least in the first half of this year.