February 3, 2012
Greece may conclude a seven-month effort to wrap up its second bailout in the coming days with the country’s stability hanging in the balance.
A plan that’s been in the works since July may emerge from parallel talks among caretaker Prime Minister Lucas Papademos’s coalition members; international monitors and Greek officials; and Greece’s government and its creditors, as well as tussles involving European central bankers and political leaders.
“We are in the final phase of this very critical process to shape a new financing program for Greece and to complete the loan agreement which will lighten the burden of public debt and ensure funding for years to come,” Papademos said in a statement today in Athens. The plan will help “restore fiscal stability, improve competitiveness, revive the economy and increase employment.”
The rescue blueprint includes a loss of more than 70 percent for bondholders in a voluntary debt exchange and loans likely to exceed the 130 billion euros ($171 billion) now on the table. Open questions involve how much more aid Greece needs, how much more austerity is required, and how to involve the European Central Bank in the debt swap.
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