Wednesday, August 24, 2011

Euro Zone Weighs New Plan on Greek Bailout Collateral

Wall Street Journal
August 24, 2011

Euro-zone governments are discussing a plan to have noncash Greek government assets, including real estate, offered as collateral for a new round of rescue lending to Greece, backing away from a bilateral agreement reached last week between Greece and Finland, officials said Tuesday.

The discussions come as opposition is mounting among the governments to the Finnish-Greek deal—which would see Greece pay Finland hundreds of millions of euros in cash as collateral against the loans. Crucially, German Chancellor Angela Merkel has rejected the deal, said a German lawmaker.

"It can't be that one country gets extra collateral," Ms. Merkel told parliament members of her ruling Christian Democrats, or CDU, in a meeting on European policy, the lawmaker said.

Other governments are now seeking similar deals, saying the arrangement could undermine Greece's ability to repay them.


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