February 3, 2012
A German cabinet minister rejected demands to involve the European Central Bank directly in efforts to reduce Greece's debt as international pressure is growing on the ECB to make a significant contribution to restructuring Athens' debt by accepting a haircut on its huge cache of Greek bonds.
"This is not currently an issue for us," said German Economy Minister Philipp Rösler in an exclusive interview with Dow Jones Newswires and The Wall Street Journal, when asked whether the ECB should be involved in Greece's debt restructuring. "The current discussion is primarily about private-sector involvement. European states and their taxpayers already make a massive contribution to Greece's restructuring process though their support efforts."
Mr. Rösler was speaking as a crucial deal to restructure more than €200 billion ($262.9 billion) of Greek bonds held by private investors appeared to be held up by squabbling between Germany and the International Monetary Fund over the involvement of so-called official creditors. The IMF, which together with the European Commission and the ECB forms the troika overseeing the Greek rescue, is urging the ECB to also accept a write-down on the estimated €40 billion of Greek bonds that it holds. Germany, at least for now, is refusing to throw the ECB-held bonds into the discussion.
Greek Finance Minister Evangelos Venizelos added to the pressure on the ECB on Thursday, when he suggested that Greece could not reach its goal of lowering its debt to 120% of gross domestic product by 2020 without the involvement of the ECB in the debt restructuring. "The European Central Bank has to take part," he told a meeting of Socialist lawmakers in Athens.
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