January 5, 2012
The Greek government expects to wrap up talks seeking a 50% writedown on its debt owed to creditor banks by the end of this month, after banks appeared to make concessions on the terms they would accept under a new bailout, said people with knowledge of the situation.
In exchange, Greece has agreed to consider that the new bonds be governed by English law, which means creditors would be allowed to seize Greek assets if the country fails on its payments. Until now Athens had refused to offer such collateral.
"If nothing changes we are hoping to have an agreement within the next three weeks or even earlier," a senior Greek government official said. "The threat of a disorderly default has brought about a convergence of views. Now, both sides are willing to compromise."
On Wednesday, Greek Prime Minister Lucas Papademos said Greece faces the risk of a disorderly default in March if it doesn't complete negotiations for the country's second bailout loan. Greece faces a daunting €14 billion ($18 billion) in debt redemptions coming due that month.
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