Greece 'very close' to deal with private creditors The Greek government will meet Wednesday with the head of a group of private bank creditors to resume talks on cutting nearly a third of the country's massive debt, a finance ministry source said. The talks with Charles Dallara, head of the Institute of International Finance, are aimed at writing off about 100 billion euros ($128 billion) in Greek sovereign debt held by private sector financial institutions. Last Friday, the talks hit an impasse over the terms of the new bonds that will be issued to replace those being written-down with both sides holding out. A source close to the talks told AFP a rate of five percent had almost been agreed. Representatives for hedge funds protested that the rate was too low, upon which the IMF and Germany suggested an even weaker level of three percent. The finance ministry source told AFP that Athens "expected a positive result by this weekend at the latest." "After the temporary pause last week, the parties have reflected on the specifics and are back," a government source said. "All the variables are taken into account," the official said, adding that the interest rate, or coupon, offered on the new bonds to replace maturing debt "is the most visible aspect but not the only one" in the negotiations. The finance ministry source did not rule out "a positive result even by this evening" after Dallara and other private creditors met Prime Minister Lucas Papademos and Finance Minister Evangelos Venizelos. But Greece concedes that a 100-percent participation in the deal by private creditors is "highly improbable," the government source said. The head of Greece's debt management agency and a senior finance ministry official were in Washington on Tuesday for talks with US Treasury officials and sat in on technical meetings at the International Monetary Fund, a source close to the debt talks said. Papademos said in a New York Times interview published Wednesday that "taking into account the complexity of the exercise, I would say that we are very close to reaching an agreement." The talks with private creditors are aimed at cutting Greece's debt with them by about half and would go a long way towards reducing the nation's staggering total debt of more than 350 billion euros. The premier also warned that Greece could pass legislation to force collective action on reluctant creditors if the participation ratio is too low. "It is something that has to be considered in the light of expectations about the degree of the participation to be achieved," Papademos said. "It is contingent on the percentage," the prime minister added.