Delphic default

31 January 2011 By Neil Unmack Follow @unmack1

Europe seems ready at last to tackle excessive Greek and Irish debt. But the crisis isn’t over. Buybacks, and an extension of loan maturity, will lighten the burden although Greece may need more relief. The Portuguese case also needs to be tackled swiftly.

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The European Union and International Monetary Fund are working on plans to restructure Greece's debt, according to the Financial Times and Greek newspaper To Vima.

Under the plans, Greece would buy back debt at a discount, including bonds held by the European Central Bank, and swap securities for longerdated notes, both papers reported. IMF and EU debt would also be extended. The debt buyback would be at about 75 percent of par, To Vima reported, adding that Greece could restructure two thirds of its debt by the end of the year.

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