* Bold EU, G20 decisions needed to tackle debt crisisATHENS, Oct 12 (Reuters) - Greece is in talks with its euro
zone partners to ease its debt burden, Prime Minister George
Papandreou said on Wednesday, adding that he hoped for bold
solutions to tackle the debt crisis at G20 and EU council
meetings.Greece’s second bailout package, which was agreed on July 21
and involved private sector bondholders, is under review with
authorities considering increasing the losses that private
creditors will incur, euro zone officials said.”We are negotiating in every way to lighten this debt. This
is the big negotiation and this is where the big problem lies,”
Papandreou told a cabinet meeting, without providing any
details.Papandreou told ministers the euro zone and the Group of 20
major economies need to provide persuasive and courageous
responses to the debt crisis at summits later this month and in
early November.Euro zone leaders agreed in July to give Athens 109 billion
euros ($149 billion) of new official financing, together with
the International Monetary Fund, to cover its funding needs
until mid-2014.In addition, under a voluntary debt restructuring deal,
private creditors would end up taking a loss — a “haircut” —
of about 21 percent in the value of their Greek bond holdings,
contributing an estimated 50 billion euros on a net basis
through mid-2014.But losses for private investors on Greek debt in the second
financing package for Athens are now likely to be between 30 and
50 percent, rather than the earlier agreed 21 percent, euro zone
officials said on Wednesday.Papandreou, who will meet EU Council President Herman Van
Rompuy in Brussels on Thursday, did not specifically refer to
the “haircuts” in his speech. He said the July 21 decisions were
still the benchmark on which decisions at an EU Oct. 23 summit
would be based.”Let’s hope these decisions will provide a definitive
solution to the problems of the euro zone and the insecurity
that has encircled Greece,” he said.
