June 8, 2011
Germany's finance minister says private creditors must share the burden of any more financial help for Greece as part of a deal to prevent it from defaulting on its debts.
In a letter to top officials dealing with the debt crisis and obtained by The Associated Press Wednesday, Wolfgang Schaeuble proposed a swap that would extend debt repayments by seven years and give Athens more time to reform its economy.
Such a move has previously been strongly opposed by the European Central Bank on the grounds it could spread turmoil through the continent's financial system, while ratings agencies have warned it could be considered a default.
In the letter to Jean-Claude Trichet, the president of the European Central Bank, the International Monetary Fund's acting Managing Director John Lipsky and other top finance officials, Schaeuble said bondholders -- so far spared losses as the eurozone countries have bailed out Greece, Ireland and Portugal -- would have to make a "quantified and substantial contribution" to the new aid package being discussed by eurozone governments and the International Monetary Fund.
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