Wall Street Journal
February 3, 2012
Greece's talks with international creditors on a €130 billion ($170.87 billion) second bailout package are proving "very difficult," Finance Minister Evangelos Venizelos said Friday, as a tentative meeting of euro-zone finance ministers on Monday has been postponed.
Addressing lawmakers, Mr. Venizelos said ongoing negotiations on a debt write down plan and a second bailout from the European Union and International Monetary Fund are aimed at boosting confidence in the country's banking system, which has seen a sharp drop in deposits.
"What we are aiming to do now with the completion of the PSI (private sector involvement), with the completion of difficult, very difficult negotiations for the new program…is to send a message everywhere, and mainly to Greek depositors, that banks have been absolutely secured," he said.
In October, European leaders and the IMF agreed to provide Greece with a new bailout, after an initial €110 billion rescue package agreed in May 2010, to cover its financing needs through 2015. But the new loan is contingent on a debt write-down plan that would slash Greece's debt ratio to 120% of gross domestic product in 2020 from an unsustainable 160% currently.
Greece depends on the new loan to stay above water. It doesn't have the money to redeem €14.4 billion in maturing bonds on March 20 and if negotiations collapse it could become the first euro-zone country to default.
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