Crucial debt talks to resume in Athens

Crucial debt relief talks to resume in Athens after stalling on interest flap

Associated Press
Crucial debt talks to resume in Athens
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A protester holds a black cross with the legend reading "Troika", during a rally in central Athens, Tuesday, Jan. 17, 2012. Strikes and demonstrations over austerity measures hit the Greek capital of Athens on Tuesday, as international debt inspectors returned to resume their scrutiny of the country's reforms. The troika cross refers to the anticipated death with outside influences. (AP Photo/Dimitri Messinis)

ATHENS, Greece (AP) -- Global bank representatives are due back in Athens to restart debt talks later Wednesday with the government in negotiations that are crucial to avoid a disastrous default.

The heads of the Institute of International Finance, a global banking association, are to return after negotiations stalled last week.

Greece is seeking a deal to write off half of the debt it owes private bondholders, who would get new bonds with extended repayment periods. Talks have been held up by a disagreement on interest rates for the new bonds.

Greece needs to clinch the deal quickly, before it faces a euro14.5 billion ($18.6 billion) bond repayment on March 20. The bond swap is a key part a new euro130 billion ($166 billion) bailout package in loans and bank support from international rescue creditors.

Also Wednesday, Greece's unions and employers are to start talks on reducing labors costs, but the negotiations were disrupted when protesters from a Communist-backed labor union occupied the central building where the meetings were to take place.

Greece has imposed harsh austerity measures in exchange for emergency loans from other eurozone countries and the International Monetary Fund.

EU-IMF debt inspectors are back in Athens this week to monitor progress of those reforms aimed at slashing the country's high budget deficits.

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