Greece resumes talks with creditors over €100bn debt

Head of the Institute of International Finance Charles Dallara arrives for a meeting with Greek prime minister Lucas Papademos in Athens yesterday. Photograph: Yiorgos Karahalis/Reuters

ARTHUR BEESLEY in Brussels

TALKS BETWEEN Greece and its private creditors resumed last night in the latest attempt to cut its national debt by €100 billion, a prerequisite for the country’s second EU-IMF bailout.

The new round of talks comes three days before a crucial EU summit in Brussels but European Council president Herman Van Rompuy will not convene a separate summit of euro zone leaders on Monday if there is no breakthrough in Athens.

“We don’t think that the heads of state and government can bring value-added to these negotiations, which are progressing as they should,” said a senior EU source.

This is in spite of a new warning from EU economics commissioner Olli Rehn about the viability of the current plan for Greece. Mr Rehn said more public money would be required to restore order in Greek public finances.

EU leaders have worked since October on the basis that the combination of the expected private sector haircut and a new €130 billion EU-IMF loan package would cut Greek debt to 120 per cent of GDP by 2020, the level sought by the IMF.

However, Mr Rehn declared yesterday that this target would not be reached under the current plan.

This presents a fresh difficulty to the European powers, who insist the new Greek loan package should not exceed €130 billion.

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