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Deutsche Bank chief doubts Greece can repay

AFP/The Local · 14 May 2010, 09:58

Published: 14 May 2010 09:58 GMT+02:00

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Speaking on ZDF television late on Thursday, Deutsche Bank chief executive Josef Ackermann said he was “doubtful whether Greece will really be in a position to achieve" the repayment of the emergency loans.

However, he stressed that Athens had to be propped up, because if it fell, it would lead "with great certainty to a spillover to other countries," sparking "a type of meltdown," he added.

Ackermann’s comments are all the more surprising because they follow recent reports that Deutsche Bank itself was preparing to provide €500 million in loans to Greece on the same conditions as those set by the federal government.

The Financial Times Deutschland reported that Finance Minister Wolfgang Schäuble was trying to persuade Deutsche Bank, along with insurers Allianz and Munich Re, to lend €1 billion in total to Greece as a signal that they had confidence in the country, in a bid to stablise turbulent financial markets.

The European Union and the International Monetary Fund have cobbled together a rescue package for Greece worth some €110 billion in loans over three years, of which Germany is expected to make available €22.4 billion.

The bloc has also pulled together a fund worth almost $1 trillion designed to prevent such crises happening in the future.

The FTD said that Ackermann should have kept his views to himself on this occasion.

"There are some times when it is just better not to say anything," the paper wrote.

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Politicians, central bankers and the big players in the world of finance have gone out of their way not to say anything that risked "enflaming the debate" about a possible restructuring of Greece's debt, the paper said.

Now, "Ackermann has broken the taboo."

AFP/The Local (news@thelocal.de)

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Your comments about this article

18:28 May 14, 2010 by Henckel
Ackermann is merely stating the obvious -- Greece's economic woes are unsustainable. But in an age of reticence to make candid, truthful statements, he deserves to be commended.
18:41 May 14, 2010 by vonSchwerin
It is normal procedure for a borrower to put up collateral against a loan. What are the Greeks putting up? What's the penalty if they do default?

They could use that building in the photo as collateral. I'm sure it would look great in an expanded Pergamon Museum. On the other hand, the threat of losing it would certainly motivate the Greeks to pay back their loans.
20:05 May 15, 2010 by ColoSlim
Yeah, I wonder how much the Iraqis got for the Ishtar Gate? They probably traded a Mercedes Benz and a few dinars for the squeeze. This is a great opportunity to take on "loan" some really nice antiquities.
15:34 May 16, 2010 by Prufrock2010
Maybe that's because Bertelsmann owns a 74.9% stake in the publishing company that publishes FTD.
22:59 May 16, 2010 by Logic Guy
Well, I agree with him. Sure, it would be a wonderful thing if they do repay everything. However, let's be realistic.

What can Greee do to generate that much money?

I personally believe that it would be best for them to slowly transition out of the Euro and into another currency.

Because if Greece is forced to eventually restructure, then they would obviously drag the Euro down with them anyway.
00:25 May 17, 2010 by Prufrock2010
Logic Guy --

I'm glad you don't call yourself "Economics Guy." Jesus.
09:18 May 17, 2010 by Edmond Schindler

"I'm glad you don't call yourself "Economics Guy." Jesus. "

I am no genius in either discipline, and I try not to take pleasure in the suffering of others, but that was still so damned funny! Started my Monday with a knee slapper!
18:58 May 17, 2010 by Prufrock2010
There's plenty more where that came from as long as Logic Guy is around.
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