The tough negotiations between Greece and the bankers on Greek debt restructuring (PSI) concluded in Athens on Tuesday but without result. The two sides were unable to agree on the interest rates that would ‘sweeten’ private creditors to swallow the bitter pill of ‘haircut’ of the Greek state bonds they hold. Reuters reports citing a banking source that negotiations are expected to continue. “Greece has received a proposal by the private creditors and it will consider it. It was not rejected but the deal cannot be completed today” the banker reportedly told Reuters.
Institute of International Finance Chief Charles Dallaras has been on a two-day visit in Athens trying to solve the issue. Currently Greece and bankers disagree on the interest rate. The bankers went down from 8% to 6%, but Greek Treasury could not offer more than 4.5%. What is the bankers’ new proposal? 5.5 percent?
Finance Minister Evangelos Venizelos said during a press conference that the PSI negotiations will finalize by end of January 2012.
The Private Sector Involvement (PSI) is part of the October 26th agreement between Greece and EU for a successful second bailout for the debt-ridden country.
