BRUSSELS Euro zone finance ministers are aiming to bring Greek debt down to 120 percent of GDP in 2020, rowing back from an idea last week to shift the deadline to 2022, and discussing details of measures that would help achieve that goal, an EU official said.
Greece's debt-to-GDP ratio is forecast to reach almost 190 percent next year as the economy contracts for the sixth year running, providing a formidable challenge to policymakers who want to bring it down to a sustainable level.
One of the measures under discussion by the ministers meeting in Brussels is suspending for 10 years interest payments on loans provided to Greece by the euro zone's temporary bailout fund, the European Financial Stability Facility (EFSF).
This would make for 44 billion euros (35 billion pounds) of savings for Athens, the EU official said.
Another step could be to buy back Greek debt held by private financial institutions other than banks, estimated at 35-40 billion euros, offering up to 30 cents per one euro of debt.
A third measure would be to cut the interest on 53 billion euros of bilateral euro zone loans to Greece, to 25 basis points from the current 150 basis points.
But Germany did not agree to such a deep cut in the interest and the ministers paused for Greece's international lenders - the International Monetary Fund, the European Central Bank and the European Commission - to prepare new proposals, another EU official said.
(Reporting by Annika Breidthardt and European bureau reporters; writing by Jan Strupczewski; editing by Rex Merrifield)