Greece Still Short of Reaching Debt Write-Off Goal

Posted March 8th, 2012 at 12:35 am (UTC-5)
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Greece is edging closer to its goal of getting the country's private lenders to eliminate $142 billion of the debt it owes them, but remains short of the target as a Thursday deadline nears.

Eurogroup president Jean-Claude Junker said Wednesday, he is confident private investors' participating in a Greek debt-relief deal would reach the target and the country would avoid a default.

Junker's comment followed a meeting with European Council President Herman Van Rompuy in Luxembourg.

The Athens government says it needs the banks, pension funds and other financial institutions holding at least two-thirds of the country's private debt to agree to the write-down. But by Wednesday, agreements had only been reached covering 46 percent of the debt.

The debt write-down is part of Greece's effort to secure a new $172-billion bailout and avoid a default on its financial obligations.

Five small Greek pension funds holding about one percent of the bonds eligible for the write-down have rejected the deal, as have several investment funds and Germany's best-selling newspaper, Bild. Greece says that if it hits the two-thirds threshold for the reduction, it could seek to force the deal on its remaining creditors.