Last-ditch talks on restructuring Greek debt have taken a twist, after official creditors demanded that private bondholders take additional losses following the country's larger economic contraction than expected last year.
Officials from the European Commission, European Central Bank and International Monetary Fund called on Friday for a lower interest rate averaging 3.5 per cent on new bonds, after private bondholders had already agreed on a 4 per cent coupon, according to people close to the discussions.
The Institute of International Finance, representing holders of some €200 billion of Greek debt, denied rumours the talks had stalled, saying experts from its steering committee “will be working with Greek government officials on many aspects of the PSI (private sector involvement)”.
“The elements of an unprecedented voluntary PSI are coming into place”, it said. But it was unclear whether an outline deal would be ready for approval by eurozone finance ministers meeting on Monday – the deadline set by Evangelos Venizelos, the Greek finance minister.
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