IMF sees bigger Greek writedown for banks

The IMF\'s top economist said Friday that banks holding Greek debt could be forced to take larger writedowns than planned because of Athens\' weaker-than-expected finances. Olivier Blanchard told CNBC television that writedowns of some 200 billion euros ($255 billion dollars) worth of Greek sovereign debt held by private investors could be more than 50 percent, the level agreed late last year, to ensure Athens can balance its books. \"The (Greek) debt numbers are not good,\" the International Monetary Fund\'s senior economist told the US channel. \"There will have to be substantial haircuts. They have to be sufficient to allow Greece a breather.\" Pressed on the size of writedowns necessary to allow Athens to balance its current budget, Blanchard said it \"should be of a size which allows Greece to achieve that sustainability.\" \"The numbers will have to be worked out. As the macro numbers come in and they\'re worse, maybe the haircuts have to be larger.\" He emphasized that any deal to reduce Greece\'s massive debt burden requires the country to pursue more reforms, including \"wage adjustments\". \"In addition, it\'s clear that there\'s going to be a long, long slog. So the Europeans will have to be ready to help with financing.\" Earlier Friday the head of France\'s BNP Paribas Bank, one of the Greek debt holders, said a deal on the haircuts was very close, and that investors were set to accept losses higher than the initially agreed 50 percent.