PSI talks making major progress

Debt swap talks registered significant progress on Friday in Paris, according to the Institute of International Finance (IIF), which is representing creditors who appear to have bowed to pressure from the eurozone to accept some of its proposals.

The eurozone and the International Monetary Fund warned private sector holders of Greek debt that neither the voluntary character of the new private sector involvement plan (PSI+) nor the high percentage of bank participation are guaranteed, saying that if banks do not accept a solution rapidly, their losses may be greater.

A Reuters report on Friday cited an unnamed official from the troika team – comprising representatives of the eurozone, the European Central Bank and the IMF – who stated that although the target is for the plan to be voluntary, there is no guarantee the swap will have a voluntary character and nothing is certain yet.

The same official suggested that the troika intends to clinch a deal with Greece on the details of the new bailout during its next inspection visit to Athens in mid-January.

The IIF expressed satisfaction with the progress made yesterday, adding that private sector creditors and authorities will continue to seek a voluntary solution.

?The private sector welcomed the willingness of the authorities to work on means to enhance the quality of the exchanged debt,? the Washington-based IIF said in a statement posted on its website. ?Progress was realized and both sides agreed to continue their effort to find a voluntary solution that would help put Greece on a path of debt sustainability and economic recovery.?

?I believe we will be successful because I have had positive signs from the consultations and the course of discussions,? Finance Minister Evangelos Venizelos told Parliament in Athens on Friday.

Bank officials told Kathimerini that these developments are raising expectations of a rapid agreement in the coming days, possibly even before the end of the year, with the upgrading of the exchanged debt being the decisive improvement to the eurozone proposal to private creditors.

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