Factbox: Sticking points in Greek rescue deal talks

Reuters
February 3, 2012

Greece is racing to complete talks on a new rescue deal it needs to avoid a chaotic default when a major bond redemption comes due next month.

Officials have repeatedly claimed that a deal was around the corner, but a series of issues have proved intractable.

Following are the main problems:

ECB PARTICIPATION

With private creditors having already largely agreed to write down the value of their Greek bonds they hold, Athens has called on the ECB, its largest single creditor, to also accept some losses to cut its debt to a sustainable level.

While the ECB has ruled out joining private creditors in voluntarily cutting Greek bonds' value, it could send Athens profits from Greek bonds it holds via a roundabout route, sources said.

RELUCTANT POLITICIANS

The EU and the IMF, exasperated with Athens' repeated failure to meet targets under a first bailout agreed in 2010, want all major parties to sign up to more austerity to make sure the terms demanded in return for a second 130-billion euro rescue plan still stand after elections penciled in for April.

But the leaders of the conservative New Democracy, the Socialist PASOK and the far-right LAOS parties - who make up the uneasy coalition government led by technocrat Lucas Papademos - are reluctant to agree to more unpopular austerity ahead of the election.

Papademos plans to seek their backing in a meeting that may take place on Saturday, although that has not yet been confirmed. Without a strong consensus, Athens' international lenders will be reluctant to provide more money.

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