Thursday, June 30, 2011

German banks support Greek debt rollover

Financial Times
June 30, 2011

Germany’s leading financial institutions have agreed to roll over €3.2bn holdings of Greek government bonds falling due up to and including 2014, Wolfgang Schäuble, finance minister, announced in Berlin.

The agreement in principle – subject to further negotiation of the details and agreement on contributions from other eurozone creditors – was described on Thursday by Josef Ackermann, chairman and chief executive of Deutsche Bank, as making a “voluntary and substantial” contribution to the support of Greece.

However it was greeted with disappointment by analysts, who said the sums involved in negotiations throughout the eurozone were unlikely to add up to a major contribution to a new Greek financial rescue package, or provide any significant debt relief.

“It is not that substantial,” said Silvio Peruzzo, Europe economist at the Royal Bank of Scotland. “The assumption that 80 per cent of private creditors would participate on a voluntary basis is probably too high.”


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