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Tuesday, January 24, 2012

Greece: Eurozone finance ministers push for lower rates on private sector involvement

by Calculated Risk on 1/24/2012 08:39:00 AM

From the Athens News: Eurogroup rejects PSI deal

Eurozone finance ministers on Monday gave the thumbs-down to a plan for private sector involvement (PSI) in the writedown on Greek debt.
"We told him [Venizelos] to continue the negotiations [with Dallara] until the interest rate comes down below 4 percent," Eurogroup chairman Jean-Claude Juncker told a news conference in Brussels late on Monday.

Juncker was referring to the average interest rate (annual coupon) of the new 30-year bonds that will be issued to bondholders after the haircut of 50 percent on the face value of their portfolio.
From the WSJ: EU Ministers Resume Crisis Talks
The International Monetary Fund and the euro zone's four triple-A-rated countries—Germany, the Netherlands, Finland and Luxembourg—are pushing for a low average interest rate on new bonds to be issued as part of the restructuring ...

"Obviously Greece and the banks have to do more in order to reach a sustainable debt level," Dutch Finance Minister Jan Kees de Jager said ... He said debt restructuring terms that ensure a sustainable debt level is "absolutely a precondition" for a second EU bailout package for Greece.
Of course Greece is a small part of the problem, also from the WSJ: Fears Mount That Portugal Will Need a Second Bailout