Greece wins rescue time, hurries talks on detail

Greece, saved overnight with a slice of rescue money, said on Wednesday it wanted rapid progress on the details of a debt-slashing eurozone deal as parallel talks with private creditors got underway. \"The aim is to begin negotiations on the programme as soon as possible,\" a finance ministry briefing document said as eurozone finance ministers agreed to disburse a multi-billion-euro loan instalment that should save Athens from immediate bankruptcy. The ministry added that talks with banks holding Greek sovereign debt had \"formally\" opened in Brussels on Tuesday with the aim of persuading creditors to accept a 50-percent write-down to make the nation\'s repayment burden sustainable. \"Negotiations have begun ... formally between Greece and the private sector, with the participation of the euro working group, the European Commission, the EFSF, the International Monetary Fund and the European Central Bank,\" the ministry document said. Greek newspaper Kathimerini reported on Wednesday that there were sharp differences over the terms of the proposed debt write-down. Without citing sources, the daily said the government was proposing that the bank creditors should get 35 percent of the debt\'s total value in new bonds, carrying interest rates of 4.5-5.0 percent, and the remaining 15 percent in cash. The banks argue that such a scheme would in practice mean a debt haircut of 70 percent and they want the new bonds to pay 8.0 percent, Kathimerini said. They also reportedly want 30 billion euros from a eurozone Greek bailout agreed in October to be used as collateral. The European Financial Stability Facility was set up to support struggling eurozone economies such as Portugal and Ireland in the aftermath of the first EU-IMF Greek bailout in May 2010. European finance ministers on Tuesday said the eurozone was set to unlock its share of 8.0 billion euros ($10.7 billion) from that bailout package, worth 5.8 billion euros and blocked since August because of reform delays. \"I am very pleased. The next disbursement is a very good signal for Greece. Greece is now back on track and I am very optimistic,\" Greek Finance Minister Evangelos Venizelos said after the eurozone meeting. The IMF, whose share of the latest loan instalment is 2.2 billion euros, is expected to decide on the disbursement on December 5, Venizelos said. The minister added that the eurogroup had decided to push forward negotiations on the latest Greek bailout deal and the bank talks \"with the aim of concluding the relevant procedures in January.\" Greece needs the money by December 15 to pay wages and pensions. It also has to repay nearly 6.9 billion euros in maturing loans by the end of December, according to a study by the country\'s second-largest lender Eurobank. The eurozone in October agreed a second bailout deal for Greece, offering to slash its maturing debt burden by 100 billion euro but the accord -- along with loan payments from the 2010 aid package -- has been held up by reform delays and bickering between Athens and Brussels. The package that runs to 2014 also includes 100 billion euros in new loans and another 30 billion euros in cash to recapitalise banks hit by the bond writedown. A Greek plan to put the eurozone deal to a referendum last month backfired, with EU creditors denouncing a breach of confidence and precipitating a political crisis in Athens. Socialist prime minister George Papandreou stepped down as a result and a unity government was formed to ratify the latest bailout and hold early elections.