BERLIN (MNI) – The fiscal goals of the German federal government
would not be put at risk were Germany to provide financial aid to Greece
as part of the E30 billion contingency loan package agreed upon by
Eurozone states, German Finance Minister Wolfgang Schaeuble told the
weekly Der Spiegel in an interview published Sunday.
Under the terms of the plan, Germany would contribute up to E8.4
billion in bilateral loans to Greece, the biggest contribution of all
the EMU members.
Schaeuble repeated in the Spiegel interview that the state-owned
KfW bank would raise the money and the government would guarantee it.
“The risk is manageable,” he asserted.
Nor will the government need a supplementary budget should the
loans to Greece be called on, the minister said. But parliamentary
approval will be required. “We will still introduce a law on which the
parliament decides,” he reaffirmed.
Schaeuble warned that if Greece were to accept the loans and then
default, it would have incalculable consequences. “We must not allow a
bankruptcy of a Eurozone member such as Greece to become a second Lehman
Brothers case,” he said.
The minister pledged that Germany would help Greece if, despite the
austerity measures it has promised to implement, it continues to be a
victim of international currency speculation.
Schaeuble said there were no signs that other Eurozone member
states with fiscal problems might also ask for financial aid.
Asked about a proposal by European Economic and Monetary Affairs
Commissioner Olli Rehn for a fund to avert future defaults of Eurozone
members, Schaeuble said there needed to be a discussion about how
creditors could participate in the cost.
He reminded that in the case of a bankruptcy of a business, the
creditors have to drop some of their claims. “It should be the same in
an insolvency proceeding for a state,” he said.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
[TOPICS: M$G$$$,M$X$$$,M$$CR$,MFGBU$,MFX$$$,MGX$$$,MT$$$$,M$$FX$]
