ECONOMY

IIF meeting in Paris to discuss Greek bailout

Leading banks were meeting in Paris on Wednesday on how to support a new rescue for Greece, their spokesman told AFP shortly after a rating agency issued a new warning and another downgraded Portugal.

The critical issue, which has delayed until September any eurozone decision on a new rescue for Greece, is how banks could shoulder part of the cost of help without triggering dangerous default repercussions across financial markets.

Some of the leading banks owed money by Greece would meet on Wednesday under the aegis of their representative body on sovereign debt problems, the Institute of International Finance (IIF).

A spokesman for this body told AFP that officials from several countries would also be present.

The meeting is the latest in a series of technical sessions on how to construct the terms of participation by private bondholders in a new rescue, the spokesman said.

A banking source said that the meeting would be held at the headquarters of French bank BNP Paribas in Paris.

A French banker, who declined to be named, said: ?It is a technical meeting, and there will certainly be others.? The source said that the meeting was unlikely to result in any significant outcome, and another source said that those attending were unlikely to make any statement afterwards.

New French Finance Minister Francois Baroin said on Wednesday that a new rescue for Greece had to be ready for September and that the eurozone still had ?a few weeks? to work out how private banks would participate.

The IIF said on Friday that the international financial community was ready to take part in a private initiative to help Greece.

The IIF has said that it is working on a small number of options, and in particular on rolling over some Greek debt so that the money would not have to be repaid for many years, and on the reinvestment of debt owed into long-dated debt backed by guarantees. [AFP]