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Eurozone to provide Greece up to US$34b under German plan
By Dave Graham |
February 22, 2010, Monday
|
Print Edition
Print Edition
GERMANY'S finance ministry has sketched out a plan in which countries using the euro currency will provide aid worth between 20 billion and 25 billion euros (US$27 billion-US$33.7 billion) for Greece.
Citing "initial considerations" by the ministry, German weekly Der Spiegel said on Saturday the share of financial aid for Greece would be calculated according to the proportion of capital each country holds in the European Central Bank.
A spokesman for the ministry said he would not comment on the report, which stated that the financial assistance should take the form of loans and guarantees.
The report said all euro countries would shoulder the burden and that Germany's share in the package would amount to 4 billion euros to 5 billion euros, and be handled by state-owned bank KfW.
According to the German plan, the aid should be tied to strict conditions, the magazine said, adding that loan tranches should only be paid out once these are met.
Spokesmen for the Greek finance ministry and the European Commission declined comment on the report.
Chancellor Angela Merkel's government has so far resolutely deflected appeals to promise Greece aid despite fears that failure to help Athens could threaten the euro.
Germany in public argues that leniency would take pressure off Athens and other eurozone debtors to cut their budget deficits. Behind the scenes, lawmakers acknowledge that Germany has prepared measures if a rescue becomes inevitable.
Merkel's position has been complicated by a highly charged debate on the sustainability of Germany's welfare state.
This has helped to galvanize public opposition to Berlin funding a bailout just as her center-right coalition braces for a big test of its popularity in May, when voters go to the polls in Germany's most populous state, North Rhine-Westphalia.
Speaking to Der Spiegel, Greek Prime Minister George Papandreou told Germany he was not seeking aid, and criticized the commission for not ensuring member states adhered to the EU's Stability and Growth Pact that limits budget deficits.
Citing "initial considerations" by the ministry, German weekly Der Spiegel said on Saturday the share of financial aid for Greece would be calculated according to the proportion of capital each country holds in the European Central Bank.
A spokesman for the ministry said he would not comment on the report, which stated that the financial assistance should take the form of loans and guarantees.
The report said all euro countries would shoulder the burden and that Germany's share in the package would amount to 4 billion euros to 5 billion euros, and be handled by state-owned bank KfW.
According to the German plan, the aid should be tied to strict conditions, the magazine said, adding that loan tranches should only be paid out once these are met.
Spokesmen for the Greek finance ministry and the European Commission declined comment on the report.
Chancellor Angela Merkel's government has so far resolutely deflected appeals to promise Greece aid despite fears that failure to help Athens could threaten the euro.
Germany in public argues that leniency would take pressure off Athens and other eurozone debtors to cut their budget deficits. Behind the scenes, lawmakers acknowledge that Germany has prepared measures if a rescue becomes inevitable.
Merkel's position has been complicated by a highly charged debate on the sustainability of Germany's welfare state.
This has helped to galvanize public opposition to Berlin funding a bailout just as her center-right coalition braces for a big test of its popularity in May, when voters go to the polls in Germany's most populous state, North Rhine-Westphalia.
Speaking to Der Spiegel, Greek Prime Minister George Papandreou told Germany he was not seeking aid, and criticized the commission for not ensuring member states adhered to the EU's Stability and Growth Pact that limits budget deficits.
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