Schaeuble Rejects Haircut On Greek Debt Held By Public Sector

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BERLIN (MNI) – German Finance Wolfgang Schaeuble reiterated his opposition
to any haircut on Greek debt held by the public sector, speaking during a
television interview on Sunday.

Schaeuble told German ARD public television that under national budget
rules such a haircut would forbid the government to give any new loans to Greece
or sign guarantees for loans given to the country.

“By the way, the European Central Bank, which is [Greece's] main creditor
is also categorically rejecting” a haircut on the Greek debt it is holding, he

Still, Schaeuble said he was optimistic that eurozone finance ministers at
the Eurogroup meeting on Tuesday will find a way to grant Greece more time to
get its debt under control.

“We must find a common line,” the minister remarked. “And we must find it
on Tuesday.”

ECB Governing Council member Jens Weidmann said Friday that Greece might
need another debt haircut at the end of its current fiscal consolidation and
reform program.

Speaking at a conference organized by the German daily Sueddeutsche Zeitung
in Berlin, Weidmann said one could not deny the fact that Greece’s public debt
is currently not sustainable.

“The question if the necessity of a debt haircut arises from this is in my
view open,” said Weidmann, who is president of the German Bundesbank.

“One could ask … if it would not make sense to propose a haircut – which
one will need in the end to gain access to capital markets again – if the
reforms, which really matter, have been carried out,” the central banker said.
“The question is, if this could not be an incentive to carry out the reforms.”

–Berlin bureau: +49-30-22 62 05 80; email:

[TOPICS: M$X$$$,MGX$$$,MT$$$$,M$G$$$,M$$CR$,M$Y$$$]


[TOPICS: M$G$$$,M$X$$$,MK$$$$,M$$EC$,MFG$$$,MFX$$$,MGX$$$]


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