Greece, Private Creditors 'Very Close' to Deal: EU's Rehn

A deal with private investors to swap Greece's debt to a more manageable burden is close to being concluded and the next three days are crucial,Olli Rehn, the European Union's monetary affairs commissioner, said during a debate hosted by CNBC in Davos.

Photo: Vincenzo Pinto | AFP | Getty Images European economic commissioner Olli Rehn participates in a debate on 'The Future of the Eurozone' during the World Economic Forum (WEF).

Greece and private creditors such as banks and other financial institutions have been mired in discussions over how to swap shorter-dated bonds for new, longer-maturity ones, and analysts say the two sides striking an agreement is crucial to avoid a messy default.

Rehn said he has faith in the euro zone's future and could see how it would shape up in the next three years.

"The next three days will be very crucial for that future ... three years," he said.

"In other words, we are just about to close a deal on the private sector involvement between the Greek government and the private creditor community, if not today maybe over the weekend, but in any case preferably still in January rather than in February," he told participants in the debate.

"We are very close and we have to have a sustainable solution for Greece even if…Greece is a unique case and private sector involvement in that sense will not be applied to any other country in the euro zone," Rehn added

The coupon on the new, longer-maturity bonds was where the talks on thedebt swaphit a snag, because theInternational Monetary Fund and the EU want it to be low enough to ensure that Greece's debt will fall to 120 percent ofgross domestic product by 2020 from the current level of 160 percent.

While investors look to the talks with the private creditors to see whether the country can stay afloat, theEU and the IMFare also pressing Greece for more cuts in its bloated budget to ensure it gets a new bailout, according to a Reuters report.