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Eurozone crisis live: Greek deal on knife edge

Pressure on Greek creditors to accept larger losses mounts as eurozone finance ministers’ meeting gets underway

Today’s agenda

7.59am: The main event today is the meeting of EU finance ministers this afternoon. Here’s today’s agenda:

• Franco-German finance and economy council meets in Paris. Press
conference – 10.15am GMT (11.15am CET)
• Eurozone consumer confidence of January – 3pm GMT
• European finance ministers meet in Brussels – 4pm GMT (5pm CET)
• Christine Lagarde gives speech on 2012′s economic challenges -
5.30pm GMT (6.30pm CET)

Bond auctions
• Germany to sell €3Bn of 12-month bonds – 10.15am GMT
• France to sell up to €8.3bn of Treasury bills – 1.50pm GMT

7.30am: Good morning and welcome back to our rolling coverage of the world economy and eurozone debt crisis. Hopes of a deal in Greece with private bondholders in time for the eurozone finance ministers’ meeting have dwindled after the bondholders’ representative, Charles Dallara, managing director of the Institute of International Finance, left Athens on Saturday.

Creditors have made their ‘best offer,’ and are not willing to take any more than a 65% to 70% loss on the current value of Greek debt (with a coupon of 4%-4.5%, while the IMF has indicated it wants a coupon closer to 3%).

Even that wouldn’t be anywhere near enough to tackle Greece’s mounting debt burden, says Michael Hewson, market analyst at CMC Markets.

Let’s not forget that we started out at a 21% haircut at last July’s EU summit and the number has kept going up, at the same rate that Greece’s economy has been spiralling down.

It remains unlikely that a deal will be reached by the end of today’s EU finance minister’s summit, as originally hoped. Even so Greek officials remain confident that a deal can be reached by the next EU summit on 30th January but time is short, given the deadline of a €14.5bn bond repayment in March.

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