Greece’s private creditors were facing a 70 per cent reduction in the value of their bonds, according to a report.

The Associated Press quoted a person on Monday familiar with the negotiations.

Athens and representatives of banks and other investment funds holding Greek government bonds over the weekend came close to a final deal designed to make Greece's debt sustainable.

A voluntary deal with those creditors is one condition Greece must meet to receive a second bailout worth €130 billion ($170 billion Cdn) from the EU and the International Monetary Fund, without which Greece will default.

The person said that the 70 per cent loss was produced by cutting the bonds' face value in half, reducing the average interest rate to less than four per cent and pushing repayment of the bonds decades into the future.

The person spoke on condition of anonymity because the talks are confidential.

The report came as the heads of the 27 countries that make up the European Union wrapped up discussions in Brussels aimed at easing the effects of Europe's debt crisis.

The session ended with the leaders pledging to offer more training for young people to ease their transition to the workforce, deploy unused development funds to create jobs, reduce barriers to doing business across the EU and ensure that small businesses have access to credit.

But they did not offer any new financial stimulus.

Greek debt talks closer to a deal

Both sides in the Athens talks said they were closer to a deal, which could come within the next week. But they have been saying for a week and a half that they’ve been making progress.

Another condition of the bailout is that Greece gets its spending under control and adopts reforms that make its economy more competitive. The slow progress so far on that front has frustrated Athens’ EU partners.

Earlier in the day, European leaders faced the divisive issue posed by the German delegation that debt-ridden Greece temporarily cede sovereignty over tax and spending decisions to a powerful eurozone budget commissioner before it can secure further bailouts.

The idea has proved immediately controversial — both the European Commission and the Greek government refuted it — to the point that German Chancellor Angela Merkel pulled back on the idea when she arrived in Brussels.

She said Europe had to support Greece in implementing promised austerity and reform measures, "but all that will only work if Greece and all other states discuss this together."

The lack of progress on resolving the debt crisis held back financial markets.

The Toronto Stock Exchange's S&P/TSX composite index closed down 30.08 points at 12,436.42

The Canadian dollar fell about a fifth of a cent to 99.72 cents US.

Wall Street moved slightly lower with the Dow Jones industrial average, which had lost as much as 131 points during the session, ending down 6.74 points at 12,653.72, the broader S&P 500 index off 3.31 points at 1,313.02 and the Nasdaq was 4.61 points lower at 2,811.94.

European markets closed lower. Britain's FTSE lost 1.1 per cent, France's CAC slid 1.6 per cent and Germany's DAX was down one per cent. The euro traded at $1.31 US, down 0.89 per cent.

And crude oil for March delivery fell to below $99 US a barrel, closing down 78 cents at $98.78 a barrel on the New York Mercantile Exchange.

A nationwide strike in Belgium brought public transport to a halt Monday as EU leaders held their summit in Brussels. (Geert Vanden Wijngaert/Associated Press)

The contract fell 14 cents to finish at $99.56 on Friday.

"The situation in the eurozone continues to remain gloomy without any clarification about Greek issues," said a report from Sucden Financial in London.

All this was happening amid growing concern about Europe's debt crisis and signs of weakening European growth.

Portugal’s borrowing costs shot higher, with the two-year interest rate for its government debt jumping to 21 per cent from 14 per cent last week.

"At this rate, Portugal is going to move from the back to front burner in very, very short order," Dan Greenhaus, chief global strategist at BTIG, said in a note to clients.

And Spain reported its unemployment rate has soared to nearly 23 per cent and closed in on 50 per cent for those under age 25, leaving more than five million people — or almost one out of every four — out of work as the country slides toward recession.

Overall, 23 million people are jobless across the EU, 10 per cent of the active population.

To try to reverse that trend, the EU Commission is proposing to the summit leaders to redirect €82 billion ($107 billion Cdn) in existing development funds toward countries in dire need of help to fix their labour market.

The 27 heads of state and government got a taste of the public frustration with austerity and high unemployment as they try to get to the summit in a city paralyzed by strikes.

Belgium's three main unions joined hands in a 24-hour strike to protest national budgetary measures that have in part been imposed on Belgium by the EU. If the country hadn't met cost-cutting targets, financial sanctions would have been imposed.

"Europe has to offer jobs, social protection and perspective for the future. Otherwise it risks losing the support of its citizens," said the strike manifesto of the ACV union.

With files from The Associated Press