Editions:  Austria · Denmark · France · Germany · Italy · Norway · Spain · Sweden · Switzerland
Advertisement

Banks demand incentives to back Greek bailout

Share this article

Banks demand incentives to back Greek bailout
Photo: DPA
15:30 CEST+02:00
German banks indicated on Tuesday they want incentives before agreeing to take part in a bailout of Greece, saying they have €10 billion to €20 billion ($14 billion - $28 billion) invested in the country's bonds.

"I expect all investors will participate, as long as the whole package that is being put together, and there are lots of facets to consider, looks good," said Michael Kemmer, head of the German banking federation (BdB).

"It is understandable that there will have to be incentives because at the end of the day if someone has entrusted you with money ... then you have a responsibility for this capital," he said.

Greece has debts of some €350 billion and needs a second bailout worth more than €100 billion after a €110-billion package by the European Union and the International Monetary Fund last year proved insufficient.

Eurozone finance ministers want holders of Greek bonds - primarily banks, insurers and pension funds - to take part, possibly by agreeing to a rollover, whereby investors buy new bonds to replace ones that mature.

In doing so they have to ensure that involvement by private investors is viewed as voluntary, otherwise rating agencies could declare Athens to be in default, something which could have dramatic consequences.

Kemmer said that a rollover was one of "many conceivable intelligent ideas" and that one possible incentive might be government guarantees on the bonds.

He added that it was difficult to give the exact exposure of German banks in Greece but that it was a "manageable" €10 billion - €20 billion. The Bundesbank previously gave an estimate of some €10 billion.

AFP/mry

Get notified about breaking news on The Local

Share this article

Become a Member or sign-in to leave a comment.
Advertisement

From our sponsors

Zagreb: Spend this summer in Croatia's vibrant capital city

Lush green parks throughout the city centre, imposing heritage buildings, real Central European cafe society and Mediterranean style hospitality. Welcome to Zagreb, Croatia's stunning capital!

Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

Popular articles

Advertisement
Advertisement