Greece's bondholders may have to settle for a cut of more than 60 percent in what Athens owes them, the head of the eurozone's finance ministers has said, the first open admission that such a drastic move is being considered.
Jean-Claude Juncker, who is also prime minister of Luxembourg, was quoted late Monday by Austrian state broadcaster ORF as saying that eurozone countries are "talking about more" than a 50 to 60 percent haircut for Greece.
Experts and investors believe Greece's debt situation is untenable, even with more reforms and austerity measures, and will need to write off some of the money it owes bondholders.
Greece's second bailout, which was agreed in July but has yet to be finalized, proposed a 21 percent cut in bond repayments. Economists, however, say a 50 percent reduction would be necessary. Juncker's suggestion for a sharper cut is the first admission by a high-ranking official that even more is needed to save Greece.
Juncker said that, unlike financial markets, EU politicians were slow to react to the debt crisis, adding there is no "historical experience" for the present situation.
In the near-term, the country depends on regular installments of bailout loans, but whether it gets the next 8 billion euros ($10.9 billion) will depend on a review of its reforms by international debt inspectors to be wrapped up on Tuesday.
The International Monetary Fund, European Central Bank and European Commission are checking whether Greece has done enough to qualify for the next batch of its vital international bailout loans. Without them, the country will run out of money to pay pensions and salaries by mid-Novemeber and could be unable to repay bondholders in December.
As the debt inspectors concluded their talks, protests caused more disruption in the capital.
Workers at a key refinery went on strike, sending motorists who feared a fuel shortage to form huge lines at gas stations to fill up. A strike by municipal workers has left garbage piling up in in mounds on city streets for days. Protesters have also staged sit-ins of state buildings, including those of the water company.
© Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.