Drip , drip , drip ...... chinese water torture talks resume for the Greek debt deal

Bank negotiator says interest rate row delaying deal

19 Jan 2012

Head of the Institute of International Finance (IIF) Charles Dallara (L) and his colleague Jean Lemierre leave the Prime Minister Papademos's office after a meeting. Greece and its creditors were back at the drawing board on all terms of a planned bond swap on Wednesday in a last-ditch bid to overcome an impasse in talks and stave off a painful default (Reuters) A top banking negotiator says a row over interest rates is holding up a vital deal with Greece to cancel 100 billion euros of the country's national debt.   The bond swap talks with its private creditors need to make significant progress before Monday's meeting of eurozone finance ministers, Finance Minister Evangelos Venizelos told lawmakers on Thursday.   "To tell you the truth, a lot of things will have to be finalised by noon tomorrow," he said.   "A lot of things will have to be made official by Monday, when I go to the Eurogroup meeting."     Charles Dallara, head of the New York-based Institute of International, told CNN that he had come under pressure from outside Greece to lower rates too far in a bond-swap deal.   Dallara, negotiating on behalf of private debt holders exposed to Greece, resumed meetings in Athens after the talks stalled for five days.   "The interest rate on the restructured loans is a key issue," he said.   "Some seem to have a view that we should actually extend the loans at interest rates even lower than what the IMF and the (European rescue fund) EFSF extend their loans at, and there's not much logic in that". He made the comments before restarting talks with Prime Minister Lukas Papademos and Finance Minister Evangelos Venizelos.   Under the proposed deal, banks and private funds will forgive half of the Greek debt they hold, in exchange for a cash payment and new Greek bonds with longer maturities, in a scheme backed by the EFSF. Without the deal, Greece would face a 14.5bn-euro bond repayment on March 20 that could trigger its bankruptcy. (GW/ Reuters)