http://www.guardian.co.uk/business/2012/jan/26/eurozone-crisis-live-greek-debt-talks-resume-davos
Helena Smith, our correspondent in Athens, has learned that Charles Dallara who heads the Institute of International Finance (IIF) representing global bondholders, is travelling to Athens with a much bigger team of bankers and other private creditors who will also participate in today's discussions.
Although the talks, due to start at 8PM local time, have been described as "informal" by the IIF, Greek officials say the presence of a bigger bondholder representation should be interpreted as a "positive sign" that a deal is finally in the offing.
Underscoring the optimism, the Greek government spokesman,Pandelis Kapsis, has described the climate of the high-stakes negotiations as "warm". Kapsis told Helena that:
The atmosphere of the discussions with Mr Dallara is very good, in fact I could say warm.
The same, however, cannot be said of the ongoing negotiations between the debt-burdened country and mission chiefs respresenting the EU, ECB and IMF (known collectively as the "troika") who are in town to determine the terms on which Athens should be given a second package of rescue funds, this time amounting to €130bn in addition to the write-down that will wipe off an estimated €100bn from Greece's €360bn debt pile.
Troika representatives have held a series of fiery discussions with government ministers and other top officials throughout the week over and are none too pleased with what they have heard.
Kapsis said:
The climate that prevails in discussions with our partners is tense and problematic.
The debt inspectors are apparently applying "extraordinary pressure" for the interim government to adopt further belt-tightening measures to boost the country's lagging competitiveness now widely seen as a major obstacle for Greece's economic recovery.
"They are pressing us very hard," said another senior official who has been party to the talks. "They keep saying you need to regain competitiveness and the only way you can do this is to reduce costs and lower wages."
At €750 per month, Greece's minimum wage is €150/month higher than that of Spain, the monitors insist.
"'They are determined that is reduced by 5% and that holiday bonuses are scrapped. Politically that is a very big ask after all the measures [increased taxes. wage and pension cuts that] that have already been taken."
Predictably, unions are up in arms. Pame, the communist aligned labour force, has just announced that it will be stepping up strike action with another general walkout due on February 9th.
Portugal is coming under relentless pressure in the financial markets today, adding to fears that it, like Greece, will require a second bailout.
The yield on Portuguese 10-year bonds hit a euro-era high of 15.13% -- more than double the 7% mark that has typically been seen as unsustainable.
Five-year Portuguese bonds are yielding 20.27%.
Greek bank shares have surged by as much as 17% today, on hopes that a rescue deal can be agreed by the weekend.
Alexander Moraitakis, head of Nuntius Securities, told Reuters:
The market expects the PSI (private sector involvement) will succeed, it will mean substantial debt relief for Greece.There is also talk banks will be recapitalised with common, non-voting shares which will mean managements will stay in private hands.
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