Berlin signals support for French aid plan to Greece

29th June 2011, Comments 0 comments

Berlin has signalled support for a French plan to involve private lenders in a rescue for Greece ahead of a meeting between Germany's finance minister and its top banks, newspapers said Wednesday.

Germany's finance state secretary Joerg Asmussen described the French plan as a "good foundation for discussion" in a speech on Tuesday, the Sueddeutsche Zeitung reported Wednesday.

German Finance Minister Wolfgang Schaueble is to hold talks Thursday in Berlin with leading German financial institutions about ways to help debt-ridden Greece.

German banks and insurance companies are believed to hold some 20 billion euros ($29 billion) in Greek investments, the Sueddeutsche Zeitung said.

A spokesman for the German Federation of Private Banks (BdB) told AFP that the French plan was "the most detailed currently on the table", but that discussions were continuing on how it might be implemented.

President Nicolas Sarkozy announced Monday that France was working on a 30-year scheme to give Greece time to get on top of its debt mountain, which is now worth more than a year-and-a-half of the country's total output.

"We have concluded that prolonging loans over 30 years, and putting them on the level of European loans indexed on Greek growth, would be a system that all countries might find useful," Sarkozy told a news conference.

"We have worked very hard, the finance ministry has worked very hard with the banks and insurance companies ... on what could be a voluntary participation by the private sector," Sarkozy said.

The Greek parliament is to vote on Thursday on crash budget reforms which eurozone partners are insisting on ahead of any new aid package.

© 2011 AFP

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