BNP says no more ground to give in Greek talks

DAVOS Wed Jan 25, 2012 12:05pm EST

DAVOS Jan 25 (Reuters) - Financial markets' sentiment towards the euro zone may have turned the corner, but banks will offer no more concessions in crucial talks to reduce Greece's private sector debt, BNP Paribas chairman Baudouin Prot said on Wednesday.

He said the European Central Bank's move to flood the banking sector with almost half a trillion euros in short-term loans had helped to change the mood.

"I am a cautious optimist," Prot told Reuters at the World Economic Forum in Davos.

"We are starting to see signs of a shift in sentiment towards Europe. The ECB three-year financing facility was really a catalyst. We are on the right track, but we need to keep moving forward."

Greece is hoping to wrap up tortuous negotiations this week on a bond swap that aims to knock 100 billion euros ($130 billion) off its debt burden when private creditors return to Athens for a fresh round of talks to avert a chaotic default.

After weeks of bargaining, deadlocks and an intervention by euro zone ministers, Greece and its bondholders find themselves back at the drawing board as they search for a compromise needed to clinch a bailout for Athens before it runs out of money.

The focus of a new round of talks is expected to be whether banks budge from what they have billed as their "final offer" of a 4 percent coupon on the new bonds that Greece will swap out for existing debt after euro zone finance ministers rejected that proposal.

"The offer that is now on the table is the maximum acceptable for a voluntary deal," Prot said. "All the elements are now in place. I hope the discussion in the next few days will enable all parties to reach a constructive agreement."

($1 = 0.7708 euros) (Writing by Patrick Graham)

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