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BERLIN (MNI) – Germany and France have agreed on a way for
voluntary participation of the private sector in an additional financial
aid package for Greece, German Chancellor Angela Merkel and French
President Nicolas Sarkozy said Friday.

Speaking at joint press conference after a bilateral meeting in
Berlin, Sarkozy said the agreement was “in the spirit of Vienna.” Merkel
explained that “the Vienna initiative is a good basis” for participation
of the private sector.

Both leaders stressed that the new aid package for Greece needs to
be decided at the European level swiftly. Merkel said it would not take
until September to achieve that. Sarkozy suggested the decision might be
reached before August.

Merkel and Sarkozy explained that the plan for voluntary
involvement of private creditors will be worked out together with the
European Central Bank. “We want a program which is fully in line with
the ECB,” Sarkozy stressed. Merkel underlined that “we do not want to
trigger a credit event.”

The chancellor said she was “very optimistic” that Greece would be
able to overcome its current fiscal problems.

In other remarks, Sarkozy said France still supported the candidacy
of Italian central bank governor Mario Draghi for the succession of ECB
president Jean-Claude Trichet, a French national.

Given that France needs to be represented on the ECB Executive
Board also after Trichet retires, current board member Lorenzo Bini
Smaghi, an Italian, would have to make room for a French national,
Sarkozy suggested.

“One has to acknowledge that two Italians amongst the six members
of the Executive Board would not be a very European solution,” the
French president quipped. “Italy has given its word and I have no reason
at all to doubt Italy’s word,” he added.

–Berlin bureau: +49-30-22 6205 80; email: twidder@marketnews.com

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