Portugal, Spain 'not comparable' to Greece: Germany

28th April 2010, Comments 0 comments

The German government said Wednesday that debt problems in Spain and Portugal were "not comparable" to those of Greece, amid fears Athens' woes could spread through the eurozone.

"As regards whether there is a comparison of Spain and Portugal to Greece, and we do not see one," finance ministry spokeswoman Jeanette Schwamberger told a regular government news conference.

"It is not a comparable situation."

Asked if she expected Spain and Portugal to follow Greece's lead and request aid from other eurozone members and the International Monetary Fund, Schwamberger said: "No."

A fierce worldwide stocks sell-off was sparked on Tuesday after ratings agency Standard & Poor's cut Greek debt to junk status, while a downgrade on Portugal also stoked concerns about a widening eurozone crisis.

Greek 10-year bond yields hit a record above 11 percent, while long-term bond yields also faced heavy pressure in Portugal, Spain and Ireland.

EU leaders have already agreed in principle, with the International Monetary Fund (IMF), to offer Athens 45 billion euros (60 billion dollars) for the first year of a three-year programme of help.

As Europe's biggest economy, Germany would provide around 8.4 billion euros of this amount, making it the largest contributor among Greece's 15 eurozone partners.

But public opposition in Germany to a bailout is deep, and Chancellor Angela Merkel, facing a key state election on May 9, has stressed that Athens must first present credible savings plans for the coming years.

Germany also requires special legislation to disburse the funds, which would come from the state development bank KfW and be guaranteed by the German government.

Schwamberger confirmed on Wednesday that Berlin aimed to have the legislation signed off by lawmakers by May 7, and that the cabinet would examine a bill on May 3.

Merkel and Finance Minister Wolfgang Schaeuble were holding a flurry of meetings on Greece on Wednesday, including with IMF chief Dominique Strauss-Kahn and European Central Bank head Jean-Claude Trichet.

© 2010 AFP

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