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DEBT CRISIS

German investors ‘could sue Greece’

The German association of small investors SdK said it was considering legal action against Greece after Athens activated clauses to force creditors to accept an unprecedented debt swap.

German investors 'could sue Greece'
Photo: DPA

The swap, which was taken up by 83.5 percent of Greece’s private creditors on Friday, was needed for the release of a €130 billion, second aid package from eurozone partners for Athens to help it avert a default.

“The Greek debt exchange offer is interesting on a financial level, even for small debt holders,” an SdK statement released late Friday acknowledged. “But its technical application is totally unacceptable for small investors,” it added.

“The Greek government’s project … to force Greek bond holders to take

part in this partial default via collective action clauses violates fundamental legal principles,” the statement said.

SdK head: fatal signal to investors

It quoted SdK director Daniel Bauer as criticising a “fatal signal to all investors” that would make “Europe a banana republic.”

SdK said it was studying legal means at its disposition, and foresaw a “judicial process that lasts several years and certainly ends before the European Court of Justice.”

Greece has triggered collective action clauses to force holdouts to accept bond swap aimed at erasing more than €100 billion ($132 billion) in debt and unlock a new bailout, a government source said Friday.

The decision was taken after Greece agreed with its eurozone partners that the move was the best way to ensure maximum participation in the deal.

Private creditors are to take losses of more than 50 percent on their holdings of Greek sovereign debt under the swap.

AFP/jlb

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ANGELA MERKEL

German war crime payments debated in Greece

Greece's parliament on Wednesday began a debate on a resolution to demand the payment of German war crime reparations, an issue long disputed by Berlin.

German war crime payments debated in Greece
Angela Merkel and Alexis Tsipras in Greece in January. Photo: DPA

“These demands are always active. They were never set aside by Greece,” parliament chairman Nikos Voutsis told reporters this week.

The chamber is expected to approve later Wednesday, with cross-party support, a resolution calling on the government of Premier Alexis Tsipras “to take all the necessary diplomatic and legal steps to claim and fully satisfy all the demands of the Greek state stemming from World War I and World War II”.

A parliamentary committee last year determined that Germany owes Greece at least €270 billion for World War I damages and looting, atrocities and a forced loan during the Nazi occupation in World War II.

Reclaiming war reparations has been a campaign pledge by Tsipras since 2015. He faces multiple electoral challenges this year, with his party trailing in polls.

'Historical responsibility'

During a visit to Greece in January, German Chancellor Angela Merkel said her country “recognised its historical responsibility.”

SEE ALSO: Merkel says Germany recognizes responsibility for Nazi war crimes in Greece

“We recognize our historical responsibility. We know how much suffering we, as Germany in the time of Nazism, have brought to Greece,” she said.

In 2014, ex-president Joachim Gauck had also sought public forgiveness in the name of Germany from relatives of those murdered by the Nazis in the mountains of northern Greece.

But when it comes to actual payments, the German government has always insisted that the issue was settled in 1960 in a deal with several European governments.

Germany's government spokesman Steffen Seibert reiterated Wednesday that “the reparation issue is judicially and politically settled”. 

He said Berlin is doing “everything it can so Greece and Germany maintain good relations as friends and partners”. 

During the Greek economic crisis, there was further tension in Athens over draconian EU austerity and bailout terms seen to be imposed by Berlin hardliners.

Relations have improved over the last three years after Tsipras' government endorsed conditions linked to satisfying its creditors.

Tsipras and Merkel also worked closely on finding common ground on migration and Balkans security.

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