By Renee Maltezou
ATHENS Jan 17 International creditors
said on Tuesday they are coming back to the negotiating table
with Greece to resume talks that broke down last week on a debt
swap plan crucial to Athens' chances of avoiding a messy
Debt-choked Greece needs a deal with private bondholders
very soon on how much financial pain they are willing to bear to
persuade the EU and IMF to extend a new bailout and keep the
state afloat when a big bond redemption comes due in late March.
Negotiations will get under way again in Athens on Wednesday
after breaking down last Friday over the interest rate on new
bonds Greece will offer and a plan to enforce investor losses.
With time running out to clinch a deal, the interruption of
talks raised growing concerns over a possible disorderly default
by the euro zone member state, whose capital was again the scene
of anti-austerity strikes and street protests on Tuesday.
The Institute of International Finance, which negotiates in
the name of private bondholders, said its managing director
Charles Dallara and Jean Lemierre, special adviser to the
chairman, would be back to resume the talks on Wednesday as
"They reiterated their commitment to seeking an agreement on
a voluntary debt exchange for Greece and encouraged all parties
to work in good faith toward this end with a sense of urgency,"
the IIF said in a statement.
Meanwhile, a team of EU, IMF and ECB officials started
combing through Athens' books on Tuesday to put together a
130-billion-euro rescue package the country needs, together with
the debt swap deal, to avoid bankruptcy.
Technocrat Prime Minister Lucas
Papademos has urged the coalition parties to put their political
differences aside to push forward with
reforms agreed with international lenders.
He was scheduled to meet party leaders on Wednesday and
Thursday, ahead of the EU and IMF mission chiefs '
visit on Friday .
But ordinary Greeks, who have been hit hard by tax hikes and
spending cuts which were part of a first bailout agreed in 2010,
fear more austerity and wage cuts with the second bailout and
say they cannot take more belt-tightening.
Thousands of angry Greek workers marched to parliament to
protest against the lenders' visit, waving banners reading "EU,
"We want them to get lost. They are pushing the country
towards collapse with these measures. They are selling off
Greece," said Yannis Tsalimoglou, a 51-year old dockworker,
whose income has taken a 30-percent hit with the crisis.
Greece has entered its fifth consecutive year of
austerity-fuelled recession, with unemployment reaching a record
high of 17.7 percent in the third quarter of 2011.
"We must resist," said 52-year-old mother of two Evgenia
Panagiou, a private sector employee who has not been paid since
October. "Why are they doing this to us? It's not our fault.
They (politicians) devoured the money and they are still getting
the same big salaries."
Without the debt swap deal, which would see creditors
voluntarily giving up at least 50 percent of their promised
returns, the EU and IMF have warned they will consider that
Athens' debt is not back on a sustainable track and will not
release further aid.
While officials involved in the negotiations say all parties
are increasingly nervous about the risk of a disorderly default,
European Central Bank Governing Council member Ewald Nowotny
said involving private sector investors was a challenge that
could be mastered.
"It is a problem that, with a cool head, can be resolved,"
Nowotny said on Tuesday.
The strike brought the Athens metro to a standstill on
Tuesday and no ferries left from its main ports. Journalists
walked off the job and buses only ran for part of the day.
Strikes and protests last year did not make the government
budge from the austerity path required by its lenders in return
for aid, and Papademos has vowed to do what it takes to avoid a
But analysts say "a silent anger" is growing among ordinary
Greeks. If sacrifices do not bear fruit and if the new
government fails to meet targets, protests may attract a higher
turnout and get violent again.