January 31, 2012 / 12:50 AM / 6 years ago

Greece's Papademos seek on debt deal by end of week

BRUSSELS, Jan 31 (Reuters) - Greek Prime Minister Lucas Papademos said negotiators had made “significant progress” in talks to strike a restructuring deal for Greek government debt, with the aim of having a definitive agreement by the end of this week.

“Significant progress has been made in talks about private sector involvement,” Papademos told reporters early on Tuesday following a meeting with senior officials from the European Central Bank and the EU after an EU leaders’ summit.

“We are seeking to conclude negotiations with the troika by the end of the week,” he said, referring to the team of analysts from the ECB, the European Commission and the International Monetary Fund who are responsible for monitoring Greece’s progress in meeting budget deficit targets.

Papademos said the major sticking points to be agreed with the troika were on deeper spending cuts and labour market reforms.

Those commitments, together with a deal with private sector bondholders on taking a 50 percent face-value writedown on the near 200 billion euros of Greek bonds they hold, are needed before the troika can sign off on a second rescue package for Greece.

That aid package, which is expected to total 130 billion euros but could be more, depending on the extent of the private sector deal, needs to be finalised by mid-February, giving Greece time to meet a looming 14.5 billion euro bond repayment in March.

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