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"Charles Dallara and Jean Lemierre, Co-Chairs of the Steering Committee of the Private Creditor-Investor Committee for Greece, held productive discussions today in Athens with Prime Minister Lucas Papademos and Deputy Prime Minister and Finance Minister Evangelos Venizelos on the voluntary PSI for Greece. Progress was made and discussions will continue on Friday," reads the statement of Press Secretary of the Institute of International Finance Frank Vogel. Charles Dallara is the executive director of the Institute of International Finance, and Jean Lemierre is a senior adviser at France's largest bank and one of the largest Greek lenders BNP Paribas.
    Greece also confirms the statements for progress in discussions. According to sources from the office of Lucas Papademos, quoted by Reuters, on Wednesday, private creditors have rejected the joint proposal of the Greek government and the supervisory Troika of interest on new bonds slightly higher than 3.5%. Negotiating parties have reached a mutual compromise for a floating rate, calculated as follows:
new bonds with maturity by the end of 2014 will have 3% interest rate;
new bonds with maturity until 2020 will have 4% interest rate;
new bonds with maturity after 2021 will have 5% interest rate.
    For example, a 4% interest rate and a 50% reduction of the nominal value of new bonds will bring creditors a loss in net value of between 65% and 70%. Private creditors also insist on government guarantees for new bonds - i.e. there should be a bank account with the same amount of the value of the new bonds issued. This amount could be provided by the European Financial Stability Facility.
    The voluntary nature of private creditors’ involvement remains at issue given the specific technical details for the Greek debt haircut. Prime Minister Lucas Papademos does not preclude Greece to legislatively trigger the so-called Collective Action Clauses, making the debt haircut mandatory. The Chief Executive Officer of Commerzbank Martin Blesing overshadowed the reports on progress as many details remain to be specified and they are crucial in his opinion.
    Greece is in a hurry to finish the negotiations by the end of the day so that Finance Minister Evangelos Venizelos can inform on Monday his counterparts from the eurozone on the technical details of the agreement, and they in turn can begin to calculate the amount of the second rescue package for Greece. It was decided on 26 and 27 October last year that the aid should be within the range of 130 billion euro, but fears that this amount will not be enough to save Athens from bankruptcy are becoming more persuasive.
    The Institute of International Finance for its part is expected to explain its vision for the negotiations with the Greek government at a press conference in Geneva on Tuesday.