Any solution for further reducing Greece’s debt burden must be voluntary, a Greek government official said on Sunday following a meeting of EU leaders to try to find a solution to the region’s debt crisis.
Private sector holders of Greek government bonds agreed in July to take a 21 percent write-down in the value of their holdings to reduce Greece’s debt burden. But it is not sufficient and talks are now focused on a deeper write-down, possibly 50-60 percent, although it is unclear if that would be accepted voluntarily.
“A basic element of the decision is that it must be on a voluntary basis,” to avoid a credit default and the triggering of CDS contracts, the official said on condition of anonymity.
He added that the deepest write-down possible, while still retaining voluntary participation, was the overriding aim, to spare taxpayers in other European countries.
“We need to take corrective moves to make (the package) more balanced, to the benefit of the official sector and of Greece and not to the benefit of the banks,” the official said.
Euro-area leaders are due to meet again in Brussels on Oct. 26 to continue work on a new rescue of Greece and on ways to bolster the region’s rescue fund.
(source: Reuters)
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