Jan. 12 (Bloomberg) -- Greece could need additional funding under a second international aid package if there isn’t full participation of private creditors in a debt swap, Deputy Finance Minister Filippos Sachinidis said.
“If the participation level for example doesn’t reach 100 percent it’s possible that additional support from our partners will be needed, so as to cover the funding gaps,” Sachinidis said in an e-mailed transcript of an interview with Skai radio today.
Prime Minister Lucas Papademos expects to have an outline of the 100 billion-euro ($128-billion) plan next week, when talks on the terms of a second financing agreement with European Union and International Monetary Fund officials start in Athens. The discussions need to end by March 20, when Greece must make a 14.5 billion-euro bond payment.
Papademos, Finance Minister Evangelos Venizelos and Charles Dallara, the managing director of the Washington-based Institute of International Finance, had a productive meeting on the swap in Athens today and will meet again tomorrow, a Greek Finance Ministry official, who declined to be identified, said.
The talks on the voluntary debt swap “have progressed and are at a satisfactory point,” Sachinidis said.
The swap is part of a 130 billion-euro second financing package for Greece agreed by EU leaders in Brussels in October and aims to lower the country’s debt to 120 percent of gross domestic product by the end of 2020. The debt is likely to balloon to almost double the size of the shrinking economy this year without the writedown, the European Commission estimates.
--Editor: Colin Keatinge
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