Hopes rise for Greek deal

Union leaders Monday, in what would be a major shot in the arm to the summit.
“We’re very close,” he told the World Economic Forum in Davos. “They’re about to close a deal, if not today maybe over the weekend, preferably in January rather than February.”
As he spoke in Switzerland, the Greek government in Athens was in talks with private creditors on a voluntary exchange of bonds that would wipe 100 billion euros (US$130 billion) off the country’s debt of 350 billion euros.
The deal under discussion would see private creditors take a “haircut” of at least 50 percent on 200 billion euros in debt. Previous talks stalled over the amount of interest to be paid on the remaining debt.
Any failure to strike a deal could trigger a messy default, which would be an economic disaster for Greece itself and a threat to banks holding too much sovereign debt while piling pressure on other eurozone states.
Rehn said Greece would remain a special case and that the private lenders would not be required to take losses on any other eurozone country’s debt, thanks to plans for a better eurozone financial safety net.
“While I know more or less how the eurozone will look in the next three years, I know that next three days will be very crucial,” he said.
“We need a very sustainable solution for Greece, even if Greece is a special case,” he told the audience of business leaders and top politicians. “Private sector involvement will not be applied to any other country of the EU.”
Speaking at the same debate, German Finance Minister Wolfgang Schaeuble said he expected Greece to avoid a default but he warned its debt level should not exceed 120 percent of GDP. – AFP.