Luxembourg (MNI) – Belgium Finance Minister Didier Reynders Tuesday
left open the possibility of a larger private sector haircut on Greek
sovereign debt than has so far been agreed, stoking further speculation
that the second Greek bailout deal of July 21 may be re-considered.

“We will see,” Reynders responded, when asked about potential
additional demands on private creditors beyond the 21% haircut that is
expected to result from a proposed debt exchange currently being
negotiated.

“We [will] try first to implement” the proposed E109 billion new
bailout package for Greece “and the decisions of the 21st of July,” he
added, referring to a planned expansion of authority for the European
Financial Stability Facility and the private sector debt swap plan. “We
need some votes in some parliaments and we also need to conclude [talks]
with the private sector.”

Eurogroup head Jean-Claude Juncker earlier Tuesday came down more
strongly on the side of revisiting the current private sector deal,
which foresees a contribution from private bondholders of around E50
billion.

“As far as PSI is concerned, we have to take into account that we
have experienced changes since the decision we have taken on July 21,”
Juncker said during a press conference. He described possible changes as
“technical adjustments.”

During the World Bank and International Monetary Fund Annual
Meetings in Washington late last month, German Finance Minister Wolfgang
Schaeuble made clear that the private sector might have to take a bigger
hit than previously agreed.

“Clearly the figures have changed,” Schaeuble said at the time. “I
would be surprised if the conditions for the payout of the next aid
tranche [from Greece's first bailout plan] have changed, but not the
conditions for an additional aid programme,” he added.

On Tuesday, Reynders also said that Europe needs “all necessary
backstops in place” for its banks and that Greece has indicated that it
needs the next tranche of its first bailout package by the second week
of November.

–Frankfurt newsroom +49 69 72 01 42; e-mail: jtreeck@marketnews.com

[TOPICS: M$X$$$,M$$CR$,MGX$$$,MT$$$$]