BERLIN (MNI) – German Finance Minister Wolfgang Schaeuble in an
interview published Monday revealed first details of his government’s
proposal for restructuring sovereign debt in the case of a future fiscal
crisis of an Eurozone member state.
“I envisage a two-stage procedure,” Schaeuble told the German
weekly Der Spiegel. If a country gets into payment problems, the
European Union should start a consolidation and restructuring program,
he said.
“In a first step, the maturities for bonds which are due during
that critical phase could be stretched,” the minister proposed. “If that
does not help, private creditors need to accept, in a second step, a
reduction of their claims. In return they would get guarantees for the
rest.”
EU heads of state and government in Brussels agreed last month to
establish a permanent mechanism to aid Eurozone states that fall into
financial difficulty. Germany has made clear that it insists on having
private creditors shoulder part of the financial burden in future
crises.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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