PARIS ? European finance ministers will try on Monday to give new momentum to talks on a Greek debt relief deal that is crucial to avoid a default but remains elusive due to disagreements with the country's private creditors.
A deal would see Greece's debt load lightened by about euro100 billion ($129 billion) by having the creditors swap their Greek bonds for new ones of a longer maturity and potentially lower interest rate.
Germany, which is heavily involved in the negotiations because it pays for most of Greece's bailout, is leading a push for the new bonds to pay lower rates than the creditors are currently willing to accept.
The French and German finance ministers, Francois Baroin and Wolfgang Schaeuble, were holding talks in Paris before a meeting with their eurozone counterparts later in the day in Brussels.
Greek officials say negotiations on the private debt writedown are continuing over the phone, while no appointment has been set yet for new face-to-face talks this week.
Last week, representatives of the country's private creditors held three days of intensive talks with Greek Prime Minister Lucas Papademos and Finance Minister Evangelos Venizelos on the bond swap, which is officially called-Private Sector Involvement, or PSI.
The negotiations had been due to resume Saturday, according to Greek officials. But Charles Dallara, managing director of the Institute of International Finance, which is handling the talks on behalf of banks and other private holders of Greek government bonds, left for a "long-standing engagement" in Paris on Saturday.
Dallara told The Associated Press over the weekend that he is "constantly talking by phone" with Greek officials and that the talks are "coming together."
The IIF's legal and financial advisers are still in Athens working on several "outstanding issues" with Greek officials and Dallara will return "as needed," a spokesman said.
On Sunday, Dallara was quoted by private Antenna TV as saying he had presented Athens with "the best possible" proposal on the debt writedown, and that "the main pieces are in the puzzle."
"I believe the elements now are in place for a historic voluntary PSI deal. It is a question now really of the broader reaction of the European official sector and of course the IMF to this proposal," he said.
Having the creditors accept the deal voluntarily would avoid the payout of insurance on the restructured bonds. The EU and IMF are trying hard to keep it a voluntary deal, but Dallara suggested their demands were pushing the limits of what the private creditors could consider voluntary.
"Our offer that was delivered to the Prime Minister is the maximum offer consistent with a voluntary PSI deal," he added. "We are in a crossroads. Either we choose a voluntary debt restructuring (or) the alternative is to choose the path of default."
Dallara said he was "quite hopeful" that common ground can be reached "in the very, very, very short term."
The writedown is a key part of Greece's second international bailout, agreed in October but not yet finalized. Since May 2010, the country has been surviving on a first euro110 billion ($142 billion) batch of rescue loans agreed on condition of deep spending cuts and sweeping public sector reforms.
Debt inspectors from the EU, the European Central Bank and the International Monetary Fund ? collectively known as the troika ? will be meeting government officials in Athens this week on the course of the austerity program. Without approval from the troika, Greece will be cut off from its rescue loan lifeline, which would force it into a messy default on its debts in late March and ? most likely ? abandon the euro.
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Paphitis contributed from Athens.
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