Greece attempts to crawl out of debt with swap deal

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Greece is hoping to close a crucial debt swap deal by the end of the week. The debt-ridden country, which experienced economic collapse last year, is aiming to complete negotiations before February.

Government talks are currently in their ‘most delicate phase’ as they hope to swap debt bonds with Price Sector Involvement (PSI).

The Institute of International Finance (IIF) which is a body representing banks and other significant investment firms will commence meetings on Thursday (today) for negotiations over a debt swap.

A government spokesman is reported to have said; "The target is to conclude the PSI agreement within this week."

Charles Dallara, Head of the IIF, will visit Athens. However, the duration of her stay “will depend very much on the outcome of the negotiations," IIF spokeswoman Emily Vogl said.

The European debt crisis has taken its toll on Greece and now the country is trying rebuild its economy.

Athens is urging private creditors to swap their Greek government bonds for new ones at half the face value. This would ultimately reduce the country’s outstanding debt by €100 billion.

This is a good deal for investors who can buy bonds at a lower rate, however, they also face high interest rates. Whilst investors are interested, this debt swap is critical to bring Greece’s debt out of troubled waters.

The Euro-zone and the International Monetary Fund believe that the high interest rates would prevent Greek debt from plunging further into a vast pit of financial turmoil.

Transfer Money to Greece

If you are looking to invest in Greece, think carefully about how you will be transferring money to Greece. Foreign currency exchange rates quoted by banks are almost always worse than the exchange rates available through specialist currency dealers.

So if you are sending money to Greece – which you will inevitably have to do if you are looking to make a property investment, be sure to compare the market before you buy your overseas currency.

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