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Greek debt swap negotiators depart Athens without deal

Technical team stays on and talks will continue over the phone, sources say, ahead of eurozone finance ministers’ summit

Chief negotiators for Greece’s private creditors have departed Athens without a deal on a debt swap plan that is vital to avert a default, sources close to the negotiations said.

A technical team stayed in the Greek capital to work on details, and negotiations will continue over the phone, but it is unlikely a deal can be clinched before a meeting on Monday of eurozone finance ministers, the sources said.

Greek officials had expected Charles Dallara, the Institute of International Finance chief who represents the creditors, to hold meetings on Saturday but he left early in the day for Paris.

The IIF denied that Dallara and his adviser Jean Lemierre had left unexpectedly and said they had longstanding personal appointments.

Following several rounds of talks from Wednesday to Friday, Greece and its private creditors are converging towards a deal in which the creditors will take a real loss of 65% to 70%, sources said. But a lot of details were still unresolved, including legal aspects of the deal.

“Discussions will continue over the phone this weekend but an agreement is unlikely before next week, if there is an agreement at all,” one source said. “Things are complicated, we are getting closer on the numbers but there is still quite some work ahead.”

Much of the attention will now turn to the finance ministers’ meeting in Brussels, and to how Germany and the IMF view the progress in the debt swap talks.

The IMF and EU countries, in particular Germany, want to make sure the deal puts Greece’s derailed finances back on a sustainable track before they agree to a new €130bn bailout, which is also crucial to avoid a default. How much money Athens needs from official lenders also depends on the details of the debt swap deal.

The IMF insists any deal must ensure Greece’s debt burden will be cut to 120% of GDP by 2020, from 160% now, as agreed at an EU summit in October, and has warned that this is made more difficult by the fact that Athens’ economic prospects have deteriorated since.

The IIF repeated on Saturday that progress was made and said the talks were continuing. “They [Dallara and Lemierre] are both fully available to the Greek government’s leadership by telephone should this be necessary,” the IIF said.

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