Greek quest for debt relief faces hurdles in Paris

As Greek Prime Minister Antonis Samaras tries to follow Ireland and Portugal out the bailout exit door, he faces a month of bargaining.

For a nation that’s already gone through the biggest debt restructuring in history, the key may lie in more relief. Talks that could ultimately set the stage for that begin in Paris next week when government and officials from the European Union, European Central Bank and International Monetary Fund meet to discuss September's review of the country's rescue program.

“The Paris talks are critical,” Michael Michaelides, a rates strategist at Royal Bank of Scotland Group Plc in London, said on Thursday by e-mail. “They will lay the framework for discussions that will include a debt deal as well as the 2015 budget and the latest key reforms.”

Two years ago, with Greece’s euro membership in jeopardy and the currency region close to splintering, the government persuaded private bondholders to write down about 100 billion euros ($132 billion). Greece must pass next month’s bailout review before European partners will consider writing off more borrowing. At about 175 percent of gross domestic product, Greece’s debt burden remains the biggest of any euro member.

In Ireland, which exited its 67.5 billion-euro bailout in December, the debt ratio is forecast to be 121 percent this year, the European Commission said in May. In Portugal, the ratio will be 127 percent, it said.

Yields Decline

The yield on Ireland’s benchmark 10-year bonds dropped to about 1.76 percent yesterday compared with a peak of 14.2 percent in July 2011, while the yield on the comparable Portuguese security was 3.1 percent. Portugal’s 78 billion-euro international bailout program ended in May.

Greek 10-year yields have...