Saturday, January 29, 2011

EU Considers Loans To Greece To Buy Back Bonds

Associated Press/CBS News
January 28, 2011

Lending Greece money to buy back its bonds on the open market is "one option" under discussion as eurozone governments overhaul their euro440 billion ($603 billion) bailout fund, a spokesman for the European Union's executive Commission said Friday.

Greece's bonds are currently trading below face value, meaning the country could buy them back at a discount and cut its mounting debt pile.

The European Commission raised that idea in an internal "working document" on improving the response to the debt crisis, said Amadeu Altafaj-Tardio, spokesman for EU Monetary Affairs Commissioner Olli Rehn.

However, he emphasized that the document wasn't a proposal from the Commission, adding "It will be up to the member states to see to it that our response (to the crisis) is more effective in the future."

Speaking to journalists at the World Economic Forum in Davos, Greek Finance Minister George Papaconstantinou confirmed that the idea of bond buybacks was being discussed, but stressed that Greece wasn't "engaged in any official way in those discussions."


No comments: