Sarkozy: Greece will cut in 100 billion euros from its debt

Euro zone leaders want private sector creditors to accept a writedown of more than 50 percent on their holdings of Greek government debt, a senior EU source said on Wednesday. Such a 'haircut' would aim to reduce Greece's total outstanding private sector debt by around 100 billion euros, the source said.

In an effort to push through the deal, French President Nicolas Sarkozy and German Chancellor Angela Merkel are prepared to meet with private sector bankers on Wednesday night to negotiate face-to-face, the source said.

"The haircut will be superior to 50 percent, with 100 billion euros (reduction) of the Greek debt held by the private sector," the source said."The goal is to reach a Greek debt level of 120 percent of GDP by 2020.

"It is unclear whether the private sector, represented by the Institute for International Finance, would accept such a large writedown.Separately the source said Sarkozy would speak to Chinese President Hu Jintao soon on Chinese participation in the EFSF bailout fund.

-Reuters