June 28, 2011
Talks about how to get private investors to contribute toward a new bailout for Greece widened Monday to include a possible buyback of Greek government bonds—but people at a meeting in Rome discussing the issue said there were no guarantees the ideas wouldn't lead to a default by the heavily indebted nation.
The Rome meeting was the first gathering of Greece's official and private creditors, together with Greek government officials, since the country's debt crisis began more than 18 months ago. Greece was promised €110 billion ($156.08 billion) in aid last year from the International Monetary Fund and European Union, the first of three bailouts to euro-zone nations. But that money won't be enough to finance it until mid-2013 as originally planned.
The efforts to get a meaningful private-sector contribution to a fresh bailout, as demanded by Germany and other euro-zone governments, face a tight deadline.
Finance ministers from the rest of the 17-nation euro zone are to discuss a new Greek rescue on Sunday—assuming the Greek parliament agrees to a package of austerity measures this week. Governments are trying to reduce the amount they need to lend to Greece by seeking a framework of how to prevent investors in Greek government bonds just cashing bonds as they come due.
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