Talks over Greek deal drag into small hours
TALKS over a Greek bailout spilled into the early hours of this morning as negotiators edged closer to a deal to cut Greek debt to a sustainable level.
Japanese markets opened lower after hours of wrangling in Brussels were yet to produce a deal.
Minister did agree on measures expected to reduce Greece’s debt to between 123 and 124 per cent of GDP by 2020 – within touching distance of the 120 per cent target.
Yet extra relief from lenders is needed to drag the rate down to the targeted level. A report by the troika – the European Union, European Central Bank and International Monetary Fund – predicted debt equivalent to 129 per cent of GDP by 2020, even with the planned reforms.
And if Greek authorities were to delay reforms and austerity, debt could soar to 160 per cent of GDP by 2020.
Additional reductions would need to come from restructuring privately-held bonds and the ECB foregoing profits on its holdings, the report said.
Officials suggested that private holders were being asked to lose at least 53.5 per cent on Greek debt.
Earlier in the evening talks had stalled on demands that the troika have “permanent representation” in Athens – something Greek minister Giorgos Papakonstantinou later told Newsnight there was “no issue” with.