SINGAPORE (MNI) – Negotiations are continuing on a deal that would
see new loans for Greece and European intervention in tax collection and
sales of state assets, the Financial Times reported, citing people
involved in the talks.
The paper said the deal would also include more austerity measures
and incentives designed to have private holders of Greek debt
voluntarily extend repayments.
The paper said the new deal would result in the International
Monetary Fund and Eurozone countries lending an additional E30 billion
to E35 billion to the E110 billion promised in the bail-out package
last year. Another E60 bln to E70 bln that is needed could be raised
apart from the loans, the paper quoted officials as saying.
It said almost every element of the deal now being discussed is
strongly opposed by at least one of the governments or institutions
involved in the talks, and could therefore still unravel.
On Saturday, Governing Council member Nout Wellink said a Greek
debt restructuring would have an impact on the ability of
the European Central Bank to conduct its normal refinancing operations.
Speaking during a panel discussion on financial stability, the head
of the Dutch National Bank said that “in case of a very substantial
haircut” on Greek debt in the context of a restructuring, there might be
“an impact of course on the volume of collateral the Greek banks would
have.”
“And having said that, you all know that in our operations, our
refinancing operations, we need sound counterparties,” he observed. “And
Greek banks might be impacted by a restructuring, and it might be that
under those circumstances it might be necessary to recapitalize them.”
Wellink continued: “But from the perspective of the ECB we need
sound counterparties and adequate collateral… Insofar as a
restructuring has an impact on these two… it has an impact on the
operations of the ECB, that is self-evident.”
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