Dropping Push for Early Rescheduling of Bonds Could Permit New Aid Loans
BERLIN—Germany is considering dropping its push for an early rescheduling of Greek bonds in order to facilitate a new package of aid loans for Greece, according to people familiar with the matter.
But some officials in Berlin hope that a short-term fix can be found that would allow a full deal including a bond rescheduling later this year.
Euro-zone officials have acknowledged for weeks that Greece will face a shortfall in financing of around €30 billion ($43 billion) a year in 2012 and 2013—even after a €110 billion bailout agreed last year.
Germany has for weeks argued that private investors in Greek bonds should, in some way, bear part of the burden of any new bailout package for Athens.
Officials from the ECB, the IMF and the European Commission are currently in Athens to find a way to generate additional cash—including for the Greek government to generate more money on its own. The so-called "troika" are expected to issue their conclusions by early next week, officials said.
German officials have lost hope recently in the possibility of reaching an early agreement to extend the maturity of Greek bonds, Germany’s preferred way of involving private investors. German Finance Minister Wolfgang Schäuble has said that a debt rescheduling can’t be pushed through against the will of the ECB
Euro-zone governments and the IMF agreed in May 2010 to save Greece from bankruptcy with a €110 billion loan package, conditional on Athens slashing its outsized budget deficit. The ECB agreed to support the bailout by buying Greek government bonds in the secondary market.
On Sunday, some 30,000 protesters turned out to join the movement, while a small tent city of several dozen demonstrators have since set up a permanent protest in Athens’ central square.
Posted from Diigo. The rest of my favorite links are here.