Greece sees debt buyback, PSI as most likely options

 ATHENS, July 14 (Reuters) - Greece sees a buyback of Greek bonds by a euro zone bailout scheme and private sector involvement (PSI) in exchanging bonds as the two most likely solutions to its crisis, Greek newspapers reported on Thursday.    Citing anonymous government sources, newspapers Ethnos, Eleftherotypia and Eleftheros Typos said that the government was focusing on these options following a meeting of Prime Minister George Papandreou with some of his most senior ministers.    One of the most likely options in the eyes of the Greek government is using the European Financial Stability Facility (EFSF) to buy back bonds worth 15 to 40 billion euros at a discount of 30 percent, Eleftherotypia and Eleftheros Typos said.    The Greek government estimates that this would reduce its debt burden by at least 20 percent without creating complications with credit rating agencies, they added.    The second most likely option from the Greek government's point of view is the German proposal of exchanging Greek bonds with new Greek sovereign paper of longer maturities and lower interest rates, a move that would require PSI and lead to a selective default being called by credit rating agencies, the newspapers added.    The Greek finance ministry declined to comment.    Euro zone officials have rattled markets by struggling to reach a deal on how to involve private sector investors in tackling Greece's debt mountain, a key demand of Germany before it signs off on more support for Athens.