By Jan Strupczewski
BRUSSELS (Reuters) - Greece wants to restructure its huge public debt through cheaper refinancing, longer maturities, a write off of some principal and turning some debt into perpetual or GDP-linked bonds, but the plans have no support in the euro zone so far.
The Greek government spelt out ideas on how to restructure the debt, which is at 175 percent of gross domestic product, in two documents submitted to its creditors last week.
A restructuring has been one of the key demands from Greece in its negotiations with creditors on new financing, but until now Athens has never quite explained what it meant.
The euro zone, which holds most of the debt, does not even want to start discussing any form of debt relief before Greece implements reforms promised in exchange for the money it has already received, on which talks are deadlocked.
"Greece has to focus on the completion of the program -- that's a mutual priority, debt restructuring is not on table," Slovak Finance Minister Peter Kazimir said on Twitter.
The euro zone has explicitly ruled out any write-off of principal, though governments are considering a further extension of maturities on existing loans.
The Greek approach is ambiguous, not least because the two documents present different schemes, one more ambitious than the other.
A seven-page paper called "Ending the Greek crisis", leaked to the Financial Times, goes beyond a 47-page document entitled "Agreement on the economic policy, the reforms of the period 2015-2020", published by Germany's Der Tagesspiegel last week.
In the longer document, Athens does not ask for any existing loans to be written off, or even have their maturities extended.
Instead, it aims to use cheaper loans from the euro zone's ESM bailout fund to buy back 27 billion euros of its most expensive bonds held by the European Central Bank -- effectively rolling-over the debt on more favorable terms.
The second element entails early repayment of half of the 20 billion euros that Greece owes the International Monetary Fund by end March 2016. The logic is the same -- the IMF loans are much more expensive than money from the euro zone bailout fund.
Athens believes that combined with agreed fiscal policy measures, such measures would allow Greece to return to market financing from the end of March 2016 or sooner and hence make Greece eligible to benefit from the ECB's bond buying plan.
WRITE-OFF
The shorter document spells out a more ambitious plan. In addition to the schemes that would refinance the ECB and IMF held debt, it proposes to turn 53 billion euros in bilateral loans granted to Greece under the first bailout into perpetual bonds with a 2-2.5 percent annual interest rate.