February 17, 2012
Euro zone leaders prepared the way on Friday for the approval of a fresh 130 billion euro bailout for Greece at a meeting of European finance ministers scheduled for Monday.
At the same time, the European Central Bank began to swap its holdings of Greek bonds for new debt to shield it from losses being absorbed by private creditors.
The bailout is needed to avert a potentially devastating Greek default; Greece must redeem 14.5 billion euros, or $19 billion, in bonds by March 20. After a conference call, Chancellor Angela Merkel of Germany, Prime Minister Lucas D. Papademos of Greece and Prime Minister Mario Monti of Italy issued a statement on Friday saying they were confident a bailout deal could be reached Monday.
In doing so, euro zone leaders appeared to have put behind them the difficult negotiations over the bailout and bitter exchanges between Greek and German officials, which took place earlier this week.
Obstacles to a deal remain, though. Euro zone officials will meet Sunday to try to tackle technical issues blocking the loan package. Chief among these is the extent to which the latest bailout will succeed in cutting Greece’s stifling debt.
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