Charles Dallara, managing director of Institute for International Finance (IIF) is rushing to Athens on Wednesday for talks with Prime Minister Lucas Papademos and Finance Minister Evangelos Venizelos. The talks will focus on the participation of private investors holding Greek bonds and the proposed 50% ‘haircut’. In Frankfurt, Germany, talks of Greek PSI begin today.
Greece’s Finance Ministry said in a statement Venizelos spoke with Charles Dallara, managing director of IIF, and officials from the International Monetary Fund by phone without providing more details.
Talks on a 50% writedown for private investors holding Greek bonds are expected to begin in Frankfurt Wednesday, a person involved in the talks said earlier Tuesday, with the country’s creditors determined to enforce the cut if last month’s proposal for a voluntary participation isn’t agreed.
The cut is part of a second bailout package for Greece worth EUR130 billion and involves all EUR206 billion in Greek bonds held in private hands.
Athens is proposing a swap of old bonds with new ones plus cash as a sweetener depending on when the bonds mature.
Additionally, the heads of a delegation of international inspectors from the European Commission, the International Monetary Fund and the European Central Bank–known as the troika–are expected to return to Athens this week to seek fresh assurances from the new government on its overhaul plans. (WSJ )