Germany welcomes Greek debt deal talk

Financial Times
April 17, 2011

German government officials over the weekend grudgingly welcomed revelations about contingency plans for a Greek sovereign-debt restructuring as a way to prepare parliament for the possibility of costly legislation.

“If the eurozone does have to restructure Greece, new burdens facing the German government could be sizeable,” said one senior official. “So I guess it’s good that our parliamentarians get some hints that something’s up.”

Officials’ private comments flew in the face of denials of any such plans from the German finance ministry, which fears public talk about cutting some of Athens’ debt could unsettle nervous financial markets.

The Financial Times on Saturday reported that Berlin was drawing up plans for a Greek debt restructuring in case it became clear that Athens would miss fiscal goals agreed last year in return for emergency loans of €110bn.

The differing approaches to communicating policy were seen as unavoidable as discretion was said to be a prerequisite for government talks, while some publicity was needed to keep parliament on board.

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