Sun, May 02, 2010 page11

• Merkel looks for bailout support

  BANKING ON THE BANKS The German chancellor is hoping the private sector will support a Greek bailout plan, which would make the deal easier to sell to the public

  • REUTERS AND AFP
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  German Chancellor Angela Merkel said in an interview to be published today she would welcome a contribution from Germany’s private sector to support a Greek rescue package.

  “I would very much welcome the voluntary participation of banks,” Merkel said, according to advance excerpts of the interview to appear today in Bild am Sonntag.

  Deutsche Bank chief executive Josef Ackermann is helping coordinate German private sector efforts to support the rescue package, a senior banking source said on Friday.

  The move would make it easier for political leaders to sell a Greek bailout to the German public ahead of a key state election.

  The consortium has already promised to contribute 1 billion euros to 2 billion euros (US$1.3 billion to US$2.6 billion) toward the effort, although no formal agreement has been struck, the source said, declining to give details on how the plan would work.

  Ackermann, one of Germany’s top executives and chairman of the Institute of International Finance bank lobby, got involved in helping to assemble the consortium after a conversation with German Finance Minister Wolfgang Schaeuble, the person said.

  Deutsche Bank declined to comment on the plan, which would mark the first sign of private-sector involvement in the Greek rescue.

  German Vice Chancellor Guido Westerwelle said on Friday he expected banks in Europe wanted to and would contribute to an aid package for Greece.

  Ackermann has helped gather a commitment from “a handful of companies,” including banks, insurers and an industrial company, one source said, without naming them. German banks have the second-biggest exposure to Greece after France.

  In a previous effort to help stabilize Greece’s stretched finances, Ackermann met Greek Prime Minister George Papandreou and Greek Finance Minister George Papaconstantinou in Athens in February.

  Germany is preparing to agree to contribute to a eurozone/IMF aid package for debt-stricken Greece once IMF and European officials have agreed on an austerity package for Athens. Berlin expects that to happen this weekend.

  A week ago, Greece asked the EU and the IMF to activate a three-year 45 billion euros rescue package this year alone as it faces a May 19 deadline to repay 9 billion euros in maturing debt.

  Greek Education Minister Anna Diamantopoulou said the “final result” of crunch negotiations between Greece, the IMF and the EU on a debt rescue package would be announced today.

  “It’s a tough and difficult program,” she said on private television channel Mega. “Greece had two options: The first was to complete the negotiations, which are still going on and for which we will have the final result [today], the other option was to choose bankruptcy, which would have led to Greece’s exit from the eurozone.”

  “We are very close to a positive agreement,” Papaconstantinou said, earlier on Friday. “The responsibility of a government is simple. To do what it can to save the country. This is what we are doing. We are producing a three-year program that constitutes the greatest fiscal adjustment ever carried out in Greece.”

  He said the measures included “a fiscal adjustment accompanied by structural measures concerning the state, changes to the state, taxation, the labor and goods market ... and pension changes.”

  The IMF and the EU have asked for Greece by next year to slice off 10 percentage points from a public deficit that reached 13.6 percent of output last year, a top EU official said on Thursday.
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