Feb. 17 (Bloomberg) -- The Greek government is drawing up legislation that could be used to impose loses on investors who don’t support the debt swap that’s part of the country’s new bailout package, said two euro-region officials familiar with the situation.
The law may be introduced to parliament in Athens in the coming days, said one of the officials, who spoke on condition of anonymity because the deliberations are confidential. Euro region finance ministers are prepared to back the use of so- called collective action clauses if a voluntary debt swap doesn’t draw enough participation, the other person said.
Getting investors to agree a writedown on the debt is a condition for sealing a second Greek bailout as officials seek to cut Greece’s debt load. Euro-area finance ministers have slated a Feb. 20 meeting as a make-or-break effort to solve open questions on a new Greek rescue agreement, Deputy German Finance Minister Steffen Kampeter said in Hamburg last night.
Chancellor Angela Merkel, Italian Prime Minister Mario Monti and Greek Prime Minister Lucas Papademos held a conference call earlier today and are confident that the Feb. 20 meeting will “find a solution for open questions,” said Steffen Seibert, Merkel’s chief spokesman.
Giorgios Zanias, chairman of the Council of Economic Advisors to the finance ministry, didn’t respond to calls on his cellphone.
The European Central Bank is swapping its Greek bonds for new ones to ensure it isn’t forced to take losses in a debt restructuring, three euro-area officials said yesterday.
--Editors: John Fraher, Alan Crawford
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