Greek PM :Debt rollover talks 'complex'

Complex legal issues are problematic for attempts by Greece and its creditor banks to rollover the national debt, Greek Prime Minister Lucas Papademos said on Friday. "It is a composite and complex procedure," Papademos, a former central banker and European Central Bank deputy chief told parliament, adding that the government had not immediately accepted a request by banks that the procedure be governed by British commercial law. "As regards the law that will govern the loan agreements, it is one of the issues under discussion with creditors. The creditors' request that the loan agreements be bound by Anglo-Saxon law has not been accepted," he said. "It is an important part of the negotiation which will taken into account under the full parameters that will govern the final agreement," Papademos said. Private banks have traditionally preferred to have debt restructuring accords based on British or US law because they feel they are more flexible and better protect their commercial interests in dealings with sovereign governments. "The various sides have strategies and have initial positions which are not certain to be reflected in the final result," Papademos said. Athens said it had formally opened talks with banks holding Greek government bonds in Brussels on Tuesday with the aim of persuading creditors to accept a 50-percent write-down to make the nation's debt repayment burden sustainable. Reports have cited sharp differences over the terms of the proposed debt write-down but Papademos said on Friday that no details would be released while the discussions are ongoing. "It would not be advisable or responsible to publicise elements on our national position while (the procedure) is ongoing," the premier said. The eurozone in October agreed a second bailout deal for Greece, offering to slash its maturing debt burden by 100 billion euros but the accord -- along with loan payments from the 2010 aid package -- has been held up by reform delays and bickering between Athens and Brussels. Papademos' administration -- which took power last month to ratify the eurozone deal and then hold early elections -- faced a first test on Thursday with a general strike against a new austerity budget to be approved next week. Unions say that the recovery programme followed since 2010, and set to continue until at least 2015, has only worsened recession and unemployment. A second rescue package agreed last month and that runs to 2014 also includes 100 billion euros in new loans and another 30 billion euros in cash to recapitalise Greek banks who will be hit by the bond write-down. Papademos insisted that Greece stood to gain from the latest debt deal. The provisions of the October accord "are particularly beneficial to our country. And for this reason, the government and the parties backing it have pledged to implement these decisions and the economic policy that stems from them," he said. The premier noted that EU leaders had to address the broader debt crisis that has also engulfed Ireland and Portugal and now threatens Italy and Spain in a "more effective way." "It is important to deal with the expansion in the eurozone crisis in a more effective way, with greater progress on fiscal convergence and the strengthening of economic governance on Europe," Papademos said.