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Petros Giannakouris, Associated Press
A man walks next to the ruined marble columns of the 5th century B.C. Temple of Poseidon at Cape Sounion, south of Athens, on Wednesday, Jan. 11, 2012. Greece's development minister admitted Wednesday that the debt-crippled country's budget deficit would hit 9.6 percent of GDP in 2011, more than the 9 percent initially projected.

LAGONISSI, Greece — Greece's finance minister on Wednesday said talks with banks for a debt reduction deal worth €100 billion ($127 billion) are at "a very good point."

Evangelos Venizelos made the remark a day before he is due to resume talks in Athens with Charles Dallara, the head of the Institute of International Finance, a global banking association that is representing private bond holders.

Greece is hoping to finalize the deal soon with private investors for a voluntary 50 percent reduction in the value of their Greek bond holdings — before a looming March deadline to repay €14 billion ($17.8 billion) in bonds that will come due.

"Our discussions with the private sector ... have advanced and are now at a very good point," Venizelos told an investment forum at a seaside resort near Athens.

The deal, said the minister, would insure "a sustainable public debt in the long run, which will have been reduced by about €100 billion, or 47 per cent of gross domestic product, and will be absolutely sustainable by 2020."

Also Wednesday, Fitch Ratings said Greece's financial troubles could still worsen the eurozone crisis if it could not work out the debt reduction deal with creditors.

Fitch's head of sovereign ratings David Riley said Greece "still has lots of potential to plunge Europe into crisis" and that "time is running out."

He said one complicating factor in the private creditors' deal was the European Central Bank's refusal to write down its estimated €45 billion ($57.2 billion) in Greek bonds. That means private bondholders have to be asked to take on more losses to reach a given reduction in Greece's debt load — which is hoped to fall to 120 percent of GDP by 2020 if the deal goes through.

Near-bankrupt Greece is currently surviving on rescue loans from other eurozone countries and the International Monetary Fund, but will require a second bailout deal from emergency creditors and the private bond writedown to contain its massive national debt.

The country's interim coalition government is now rushing to pass a new batch of reforms and cutbacks to secure the second €130 billion ($165 billion) package approved in October but not yet finalized.

With recession in its fourth year, Greece is struggling to meet deficit-reduction targets and is calling on unions and employers to hammer out a voluntary wage-reduction deal for the private sector to try and make its battered economy more competitive.

Greece's budget deficit is expected to hit 9.6 percent of economic output in 2011, about half a percentage point above target, the development minister acknowledged Wednesday.

Michalis Chryssochoidis said an increase in the use of EU structural development funds helped lower government overspending from 10.6 percent of GDP in 2010.

Under its bailout commitments, Greece has promised to sell off a massive €50 billion worth of state assets — including €25 billion in real estate — but has so far only raised a total €1.56 billion under that program.

Privatization fund head Constantinos Mitropoulos insisted initial investor interest was encouraging.

"Our estimate is that we will have very strong demand for what we are going to put on the market," he told the Lagonissi economic forum. "One problem is that Greek assets are strongly devalued ... We are trying to close the gap between value and price to the minimum possible."

He said assets up for privatization or concession this year would include public stakes in gas, refinery and mining companies, land on the islands of Rhodes and Corfu, a northern highway, 39 regional airports and 12 harbors.

United Arab Emirates Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan attended the business forum at the Lagonissi resort south of Athens, and later met with Prime Minister Lucas Papademos and other officials.

Gatopoulos reported from Athens. David McHugh in Frankfurt also contributed to this report.