Financial Times
June 8, 2011
The German government wants Greece to offer all holders of its sovereign bonds a seven-year extension of maturities as a condition of more financial aid from Berlin, Wolfgang Schäuble, finance minister, said in a letter to his European Union colleagues.
In the document, Mr Schäuble demands “a quantified and substantial contribution” by bondholders as a condition of German support for a new aid programme for the government in Athens.
To achieve this, he asks eurozone colleagues to use their June 20 meeting to give Greece – and possibly the International Monetary Fund – a “clear mandate” to initiate the process of involving owners of Greek sovereign bonds.
Should the eurozone fail to reach agreement on new payments to Greece by mid-July “we face the real risk of the first unorderly default within the eurozone”, Mr Schäuble said in the two-page letter sent recently.
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