The progress of the private sector involvement plan (PSI+) and the participation in the haircut on loans issued by banks to state utilities were the focus of Friday?s meeting between Finance Minister Evangelos Venizelos and the governors of the country?s main commercial banks in the presence of Bank of Greece Governor Giorgos Provopoulos.
Venizelos referred to the vital importance of private sector involvement and the crucial success of the program in order to have the second bailout package to Greece released.
Bank officials appear optimistic about the success of the plan, stressing that domestic lenders hold no less than 45 billion euros? worth of state bonds, while another 23 billion euros is held in Greek bonds by the country?s social security funds. As a result the Greek share amounts to some 35 percent of all debt to be slashed by 53.5 percent.
The members of the committee that negotiated with the Greek government represent 80 percent of the bonds to undergo a haircut, i.e. 165 billion out of the 206 billion euros.
The same bank officials estimate that for PSI to prove successful and meet the target set by the eurozone, the country?s debt will need to decrease by at least 90 billion euros. They are now expressing confidence that this figure will be attained.
The managing director of the Institute of International Finance, Charles Dallara, who brokered the PSI deal on behalf of private creditors, said on Friday, «We are quite encouraged by reactions we have heard and certainly expect this to be a very successful deal.”