By ELENA BECATOROS
ATHENS, Greece (AP) â¿¿ Greece revealed Monday plans to spend up to â¿¬10 billion ($13 billion) in a bond buyback program that it hopes will help stabilize its mountainous debt.
The buyback is part of efforts to reform Greece's moribund economy and reduce its debt to sustainable levels, and is among steps the country is taking to secure the disbursement of vital international rescue loans.
If implemented on time, the new measures "are positive developments, which create plausible expectations of a recovery of the Greek economy," the Bank of Greece said in an interim report on monetary policy released Monday."This outcome, however, hinges upon a consistent implementation of all the measures legislated, together with policies that will speed up the onset of recovery, including a broader program of structural reforms," it warned. "Any delays will push the recovery back, with consequences that will be far more severe than anything that has so far happened." The bond buyback was agreed in a meeting of eurozone finance ministers in Brussels last week, which also approved the release of a critical â¿¬44 billion ($57 billion) installment of rescue loans from the International Monetary Fund and the other 16 European Union countries that use the euro. It is hoped the buyback will shave about â¿¬20 billion ($26 billion) off the country's debt. It comes less than a year after private holders of Greek debt agreed a big writedown in the value of their Greek bonds. Under the buyback program, private holders of Greek bonds, such as banks, pension funds and other investors, have until Friday to register their interest in participating. The sale will be conducted by what is known as a Dutch auction, in which prices start high and then decline. There are 20 series of outstanding bonds eligible for the scheme, which will command different prices depending on the bond maturity, the Public Debt Management Agency said. Greece has set a minimum range of 30.2 percent to 38.1 percent of the bond's face value, and a maximum of between 32.2 percent and 40.1 percent, depending on the bond issue. The buyback should be completed by Dec. 17.