Wall Street Journal
June 1, 2011
European finance officials met late Wednesday in Vienna to prepare a fresh aid package for Greece, people close to the matter said, but the talks must first bridge a crucial gap between Germany and the European Central Bank over whether private investors should share the pain of propping up the indebted nation.
Plucked from the brink of default in May 2010 by other euro-zone countries and the International Monetary Fund, Greece is again verging on a critical cash shortage.
Officials have conceded that Greece—already the beneficiary of €110 billion ($158 billion) in promised rescue aid—will need roughly another €30 billion in each of 2012 and 2013.
They are racing to figure out a plan before a key meeting of finance ministers later this month.
At least some of the money will have to come by way of a further bailout from taxpayers in Europe's stronger countries—chief among them Germany. But at the Vienna meeting on Wednesday, officials from the German finance ministry pressed for Greece's bondholders to bear some of the burden by accepting late repayment of their investments, said a person familiar with the matter. That "reprofiling" of Greek bonds is anathema to the ECB.
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