July 6, 2011
Greek banks are willing to roll over their government bonds as part of a European Union aid plan, Finance Minister Evangelos Venizelos said, as debt-holders meet in Paris today to discuss their role in rescuing the country.
“The Greek banks are ready to participate,” Venizelos said yesterday in an interview with Bloomberg Television in Athens. “We must respect absolutely the voluntary character of this procedure. This is very sensitive and I give a very crystal clear answer on this topic.”
EU leaders are insisting private investors contribute to a new aid package for Greece after last year’s 110 billion-euro ($159 billion) rescue failed to stop the spread of Europe’s debt crisis. Participation by Greek banks and pensions funds is key to the success of a plan for investors to roll over as much as 30 billion euros of maturing bonds into longer-term securities.
Greece’s bondholders are meeting with officials in Paris to discuss the rollover, said the Institute of International Finance, a banking-lobby group hosting the gathering. Talks between lenders and euro-area officials began last week in Rome under the auspices of IIF Managing Director Charles Dallara, a former U.S. Treasury official.
Creditors and EU officials are looking for a way to structure the plan in such a way as to avoid a default rating from that could prompt the European Central Bank to refuse to accept Greek bonds as collateral. Standard & Poor’s said on July 4 they would likely cut Greece to selective default if the rollover being discussed went ahead.
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See excerpt 1 and excerpt 2 of the Venizelos interview
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