ATHENS — The Greek government resumed talks with its private creditors in Athens on Wednesday in the hope of sealing a debt relief deal needed to avoid a disastrous default this spring.
Charles Dallara, a top official at the Institute of International Finance, a global banking association, returned after negotiations stalled last week, and held a three-hour meeting with Prime Minister Lucas Papademos and Finance Minister Evangelos Venizelos.
“Talks with private creditors are without a doubt at a very sensitive stage,” Greek Finance Minister Evangelos Venizelos told parliament shortly before attending the meeting with top IIF official Charles Dallara.
“We want this (deal) to happen in a way that is safe for Greece — with Greece in the eurozone — and safe for the real economy and the financial system,” he said.
The so-called private sector involvement, or PSI, deal is meant to write off 100 billion euros ($128 billion), or half of the debt Greece owes private bondholders, who would get new bonds with extended repayment periods.
Talks have been held up by a disagreement on interest rates for the new bonds and other “variables,” a senior government official told The Associated Press on Wednesday.
Meanwhile in France, President Nicolas Sarkozy on Wednesday announced a 430 million euro ($550 million) plan to drive down unemployment and restart growth, a move criticized as an attempt to boost his popularity three months before France’s presidential election.
With the unemployment rate pushing 10 percent and the recent downgrade of France’s credit rating by Standard & Poor’s, Socialist candidate Francois Hollande is hitting the president hard, saying the financial crisis reflects Sarkozy’s failed economic stewardship.
Sarkozy, who is trailing Hollande in polls, has countered that the crisis is Europe-wide and that French people who are suffering need help now. To that end, he met with business and labor leaders on Wednesday to formulate a plan to create more jobs and ease the pressure on those looking for work.
It’s unclear whether Sarkozy’s government can put the jobs plan in place before the presidential elections, held in two rounds in April and May.
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