ATHENS, Greece ? Greece's prime minister was set to resume talks Friday with representatives of private creditors in the hope of reaching a debt reduction deal essential to avoid a disastrous bankruptcy.
Speaking at the World Economic Forum in Davos, Switzerland, Friday, European Monetary Affairs Commissioner Olli Rehn said he hoped a Greek deal would be reached "if not today maybe by the weekend."
Premier Lucas Papademos and Finance Minister Evangelos Venizelos were expected to meet Friday evening for a second day with Charles Dallara, head of the Institute of International Finance banking lobby, and Jean Lemierre, senior adviser to the chairman of French bank BNP Paribas, the prime minister's office said.
A senior Greek government official said Thursday that, despite delays in concluding the negotiations, Athens is still aiming to submit its formal offer for the bond-swap deal to banks and other private creditors by Feb. 13.
Athens needs the deal before a euro14.5 billion bond repayment on March 20 that it cannot afford.
Private bondholders are being asked to forgive half their Greek debt, and in return accept cash payments and new bonds with longer maturities. The euro100 billion ($129 billion) writedown is required for a second international bailout with a looming euro14.5 billion bond repayment on March 20 that carries a serious threat of bankruptcy for Greece.
An IIF statement said Thursday's talks focused on legal and technical issues. "Some progress was realized," it said.
A major sticking point is the interest rates the new bonds will carry. Greece's partners in the 17-member eurozone are pressing bondholders to accept a rate considerably lower than they want ? well below 4 percent on average.
Whatever debt relief Greece doesn't get from the investors will have to come from its European partners and the International Monetary Fund, its bailout creditors.
In return for the rescue loans, Greece has imposed tough austerity measures, including salary and pension cuts, repeated rounds of tax hikes and labor reforms.
But frustration has grown at what international officials have said is a too slow pace of reforms, with Greece frequently missing its fiscal targets.
German Finance Minister Wolfgang Schaeuble was quoted Friday as saying that, in an interim report on Monday, Greece's international debt inspectors said that "Greece still has not fully implemented the April 2010 agreements" set out in the initial bailout.
"However, we insist on Greece fulfilling the conditions from the first aid program," Schaeuble told the German daily Stuttgarter Zeitung. "We've had enough announcements, now the government in Athens must act. Only then can we talk about a second program."
Debt inspectors from the IMF, European Central Bank and European Commission, known collectively as the "troika," are currently in Athens to negotiate details of the country's second bailout, worth euro130 billion. The debt swap deal is an integral part of the new rescue package.
Government spokesman Pantelis Kapsis said Greece would not default on its debts if it took the right steps.
"I believe that provided we move correctly, we will have time to make the deals and not go to a default," he told Skai television. "The negotiation is difficult. I don't want to create the illusion that everything is going well and that everything is easy. It is a very difficult negotiation."
The troika has been pressing for further labor reforms, with Greece's labor market seen as being uncompetitive.
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Nicholas Paphitis in Athens and Pan Pylas in Davos, Switzerland, contributed.
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