Senior eurozone officials are pressing for a renegotiation of Greece’s second €109bn ($148bn) bail-out, forcing creditors to accept a bigger writedown on their Greek bond holdings amid mounting concerns that Athens’ funding needs are bigger than estimated just two months ago.
In particular, some German and Dutch policy makers are arguing that private creditors should bear more of the burden to help finance the growing gap in Greece’s budget and want to rewrite a tortuously negotiated deal reached with private sector bondholders in July.
However, France and the European Central Bank are fiercely resisting any moves to re-open the bond deal, fearing it could spark renewed selling of shares in European banks, which have significant holdings of Greek and other peripheral eurozone debt.