–Adds Press Report On Plans To Aid Spain Bringing Down Bond Yields
BERLIN (MNI) – Eurozone member states are pondering a plan for the
European Central Bank to contribute the book profits on its Greek
government bonds to an effort to prevent an insolvency of Greece, the
German daily Die Welt reported Thursday.
According to the paper, the book profits amount to some E10-E15
billion. The profits could flow back to Athens via national central
banks and governments.
But central bank sources told Die Welt that there is massive
resistance against the plan given that it is more uncertain than ever
that Greece will be able to pay back the debt the ECB bought on
secondary markets.
The Eurozone states are also pondering a haircut on Greek bonds
which weren’t included in the first debt restructuring, namely bonds
issued under international law, Die Welt reported. These bonds amount to
some E5 billion.
Despite public threats, many in the EU don’t want to risk an
insolvency of Greece, because they fear this would further aggravate the
situation on financial markets, the paper said.
Meanwhile, German daily Sueddeutsche Zeitung reported Thursday that
Eurozone states also want to aid Spain bringing down its bond yields.
They’re thinking on having Europe’s temporary bailout fund EFSF buying
up Spanish government debt on secondary markets.
According to the paper, the German government is not completely
opposed to this idea but first wants to see that Spain makes some
progress with the reform of its banking sector. Also, it remains unclear
if the German government would get the approval of a special nine-member
parliamentary committee for such a move, Sueddeutsche Zeitung said.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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