BERLIN (MNI) – German Economics Minister Philipp Roesler no longer
rules out an “orderly insolvency” of Greece, he wrote in an op-ed piece
for the German daily Die Welt published Monday.
“To stabilize the euro there must be no taboos even in the short
term,” Roesler said. “If need be, this also includes an orderly
insolvency of Greece, if the necessary instruments for that are at
hand.”
Such an orderly insolvency procedure must have the goal of
restoring the functioning of the state — “if need be by curtailing
temporarily its sovereignty,” he explained.
The minister criticized insufficient consolidation efforts on the
part of Greece, something which is eroding the confidence in the common
currency. Greece will receive further fiscal aid from its peers only if
it meets its reform targets, he reiterated.
The German weekly Welt am Sonntag and the magazine Der Spiegel had
reported Sunday that Berlin was backing off its stance of not allowing a
Greek default under any circumstances.
Government experts believe that the situation would be manageable
even if Greece should choose to exit from the Eurozone, Der Spiegel
wrote.
The Finance Ministry is already exploring the consequences of a
Greek default for the rest of the Eurozone, the magazine reported. In a
first scenario, Greece would remain in the Eurozone. In a second, the
country would abandon the common currency and reintroduce the drachma.
Both scenarios would involve a haircut on Greek debt of 50%.
In order to contain the fallout from a Greek default, the Finance
Ministry envisages the European Financial Stability Fund (EFSF)
providing bridge loans to indebted Eurozone countries such as Italy or
Spain as well as assuring financing to banks hit by a restructuring of
Greek debt, Der Spiegel wrote.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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