Banks and other bondholders are resisting the idea by lobbying countries such as Germany and the Netherlands, where hardliners are pushing for private creditors to write down more than the current 21 per cent agreed in July’s €109 billion Greek rescue, according to people close to the deal.
Reopening the deal would be “counter-productive”, said Charles Dallara, managing director of the International Institute of Finance, which has been coordinating the response of banks and insurers with large holdings of Greek bonds. “Everybody needs to stay focused and not be distracted.”
The backlash from bondholders came as Angela Merkel, German chancellor, warned Greece that its second bail-out might have to be reconsidered if deficit reduction targets were missed.
Talking about the so-called troika of officials from the International Monetary Fund, European Commission and European Central Bank who are due to restart talks with the Greek government on Thursday, Ms Merkel said: “We must now wait to see what the troika finds out and tells us: do we need to renegotiate or don’t we need to renegotiate?”
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