As the Greek debt-talks continue with the private sector, European officials prepare to involve national central banks in the haircuts on the Greek debt as the planned 50% losses by the private creditors are not sufficient for the nation to overcome the huge amount of debt it handles, according to the German newspaper, Handelsblatt, which cited European Union diplomats.
The deal is being prepared in Brussels, while national banks are to participate in the voluntary haircuts along with the European Central Bank, which holds Greek debt of 55 billion euros (in terms of the face value), the newspaper reported.
European governments will also participate in supporting Greece to fight the debt crisis, where governments are discussing a possible cut of the interest rate of 4.5% Greece pays for the bailout loans, the newspaper mentioned.
National banks will be affected more significantly than the ECB which bought the Greek bonds below the face value, as national banks need recapitalization by the state, according to Handelsblatt.
German Bundesbank and Luxembourg's Central Bank own large amount of Greek bonds, while other central banks have hardly invested in Greek bonds, the German newspaper said, citing people in Brussels.
Governments hope that central banks would accept to voluntary participate in taking losses on the Greek debt holdings in order to avoid increasing the size of the second bailout package worth 130 billion euros, as the euro zone finance ministers projected that Greece needs between 145-150 billion euros, where Greek banks needs more than the previously projected 30 billion euros for recapitalization, the newspaper said.