Euro banks' Greek bond write downs may top 60 per cent

Euro zone's 17 finance ministers meeting in Brussels have agreed that European Union banks holding Greek bonds must accept significantly more than the 21 per cent loss on their holdings than was agreed to in July.

It now appears that write downs of euro zone banks on this score would go up to as much as 60 per cent of their holdings, if not more.

The decision was taken at a meeting of euro zone finance ministers on Friday, convened to look for ways to scale up the euro zone's bailout facility.

And, despite the differences between France and Germany, there were signs that progress had been made on some points.

"We have agreed yesterday that we have to have a significant increase in the banks' contribution," Jean-Claude Juncker, chairman of the euro group of finance ministers, said today.

The report from Greece's international debt inspectors has sought a 60 per cent reduction in Greece's debt in order to keep a second international bailout of Greece at the Euro 109 billion ($150 billion) level tentatively agreed upon in July.