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Greece weighs debt rollover as eurogroup finance ministers meet

Debt-laden Greece has a new plan aimed at plugging a funding gap next year. Athens seeks to roll over government bonds maturing in March 2014 and hopes to win approval from eurogroup ministers meeting in Luxembourg.

As Greece was facing a huge funding gap in 2014, the government in Athens was weighing whether to roll over billions of euros in debt maturing in March, Greek Finance Minister Yannis Stournaras told Naftemporiki financial daily in an interview published Monday.

"We are thinking of rolling over bonds issued by the finance ministry… about 4.5 billion euros ($6.1 billion). This means covering big part of the funding gap," Stournaras told the newspaper.

The bonds in question were issued by Athens in 2009 to provide liquidity to its banks during the financial crisis. The debt rollover plan comes as Greece faces a funding gap of almost 11 billion euros over the next two years, with the International Monetary Fund (IMF) expecting the shortfall to reach 4.4 billion euros next year alone.

Stournaras also indicated that the debt-laden eurozone country might seek approval from its international creditors to swap a sizeable part of its 240-billion-euro bailout package with a 50-year bond to provide additional debt relief.

"Greece will ask for debt relief based on the decision by the europgroup and there are many ways this can be done. There are scenarios on extending these loans to 50 years," he said.

In November 2012, the 17 eurozone finance ministers agreed that Greek bonds held by eurozone central banks could be rolled over to help cover the country's funding gap. In addition, Greece's international lenders, including the IMF and the European Central Bank (ECB), said Athens might be helped with lower financing costs and extended repayment of its loans, if it met fiscal targets this year.

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On Friday, Athens announced that the budget deficit for 2013 was significantly lower than the 8 billion euros agreed with its international lenders. Excluding the cost of debt servicing, there was even a budget surplus of 2.6 billion euros, the finance ministry said.

Eurozone finance ministers are due to discuss the progress of Greece and other bailout recipients in the 17-nation currency area at a meeting in Luxembourg on Monday.

uhe/kms (Reuters, dpa, AP)

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