Monday, October 24, 2011

IIF: Forced Greece deal "tantamount to default"

Reuters
October 24, 2011

Any deal forcing banks to take bigger losses on Greek debt "would be tantamount to default" and impose a high cost on European taxpayers, the lead negotiator for the banks warned on Monday.

Banks and other private sector holders of Greek government bonds have been holding talks with EU officials to revise a plan agreed in July and take bigger losses on the debt, but Charles Dallara, managing director of the Institute of International Finance (IIF), warned against pushing too hard.

"There are limits ... to what could be considered as voluntary to the investor base and to broader market participants," said Dallara.

"Any approach that is not based on cooperative discussions and involves unilateral actions would be tantamount to default, would isolate the Greek economy from international capital markets for many years, and would impose a harsh burden on the Greek people as well as European taxpayers who have already done a lot to support Greece," he said in a statement.

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