Greece Launches $13 Billion Bond Buyback Plan

The scheme is expected to be of particular interest to investors who bought the bonds on the secondary market at far cheaper prices than their original value ⿿ over the past few months, some Greek bonds have hit as little as 11 percent of their face value.

Greek officials are to brief eurozone finance ministers on details of the scheme when they meet in Brussels later Monday.

Greece has been dependent since May 2010 on international rescue loans from the IMF and its partners in the euro. The funds have prevented the country going bankrupt and possibly leaving the euro.

In return, Greece has had to take drastic measures to reform its economy, including slashing pensions and salaries, and increasing taxes. But the measures have not had the effect Greece's creditors had hoped, with a worse-than-expected recession now heading into its sixth year and undermining efforts to make the country's debt sustainable.

The Bank of Greece projected that the country's economy would contract by more than 6 percent of gross domestic product this year, and by a further 4-4.5 percent next year. Unemployment, currently at an annual average of just over 23.5 percent, is expected to exceed 26 percent in 2013 and 2014.

"A recession of this intensity and duration is unprecedented in Greece's peacetime history and has taken a heavy toll not only on incomes, but also on potential output and social cohesion," the central bank's report said.

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Derek Gatopoulos in Athens contributed.

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