Wall Street Journal
July 12, 2011
The leading private-sector figure in Greece's debt talks said Tuesday that euro-zone finance ministers took an important step Monday night toward finding a lasting solution to the country's debt problems.
Charles Dallara, managing director of the Institute for International Finance, said a statement from the ministers after they met Monday night was "an important signal" suggesting they were converging on "more fundamental approaches" for handling Greece's debt.
He said options under consideration included using funds from the European Financial Stability Facility, the euro-zone's bailout fund, "to support, not only maturity transformation for Greece, but also techniques to reduce the stock of debt, including bond exchanges and debt buybacks."
Debt buybacks would aim to retire market bonds and harvesting the big discounts to face value, sometimes of more than 60%, at which they trade to reduce Greece's debt burden.
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