LONDON (Reuters) - Greek Finance Minister Yanis Varoufakis is proposing to swap government debt held by the European Central Bank and the official sector for growth-linked and perpetual bonds, sparing privately held bonds from losses, a source said on Monday.
Varoufakis and Prime Minister Alexis Tsipras are touring European capitals this week in a diplomatic offensive to replace Greece’s bailout accord with the European Union, the European Central Bank and the International Monetary Fund.
“These bonds held by the ECB right now can be restructured. It’s possible to turn it into perpetual bonds to be serviced, or growth-linked debt,” said the source, who had direct knowledge of the plans but would not be named due to the sensitivity of the issue.
“It’s the same with a proportion of the other bilateral bonds held by the official sector.”
The source said the proposals had not been discussed with the ECB or officials in Germany, nor had any value been placed on a possible debt swap, calling the plan a “work in progress”.
Asked whether private sector debtors would be asked to contribute to the restructuring, the source said: “No, they have had enough hair cuts.”
Reporting by William James; Editing by Hugh Lawson and Guy Faulconbridge