In an open letter to European and international authorities, finance minister Wolfgang Schaeuble said: "Any additional financial support for Greece has to involve a fair burden sharing between taxpayers and private investors."
He warned that if Greee does not get more funding before mid-July, "we face real risk of the first unorderly default within the eurozone".
Jean-Claude Trichet, the president of the ECB, and other senior directors at the central bank have stressed that forcing banks and other private investors to take losses on Greek public debt could devastate the country's banking sector and possibly wreak havoc across the eurozone.
The ECB could accept a voluntary rollover of Greek public debt by banks to give Athens breathing space, but Mr Schaeuble wants "a bond swap leading to a prolongation of the outstanding Greek sovereign bonds by seven years".
A bond swap is likely to be considered a "credit event" by ratings agencies and put Greece in de-facto default, in which case the ECB would not be able to accept Greek bonds as collateral, putting the squeeze on weak Greek banks.
Mr Schaeuble also told coalition members of the German parliament that Greece needs an additional €90bn in a second rescue package that will get the country through 2014. Greece sealed a €110bn aid-for-austerity deal a year ago but has failed to restore confidence in its finances.
Earlier on Wedneday, eurozone finance ministers said in a statement that Greece could return to fiscal sustainability if it strictly implements economic and financial policies agreed with the EU, the IMF and the European Central bank.
The statement came after ministers from the 17 countries using the euro, called the Eurogroup, discussed the conclusions of a report on Greece by a joint mission to Athens of the IMF/ECB and the European Commission.
"We share the view expressed by the Troika that strict implementation will help restore fiscal sustainability, safeguard financial stability and boost competitiveness," the Eurogroup said.
The Greek government warned dissenters in the ruling party yesteday against rejecting an austerity plan agreed under a new international bailout deal, after data showed the depth of the nation's economic crisis.
Prime Minister George Papandreou met senior members of his socialist party to try to stem an outbreak of unrest over the social cost of the bailout before it turns into a full-scale parliamentary rebellion.
Tens of thousands of Greeks are protesting regularly against waves of austerity demanded by the European Union and IMF, as well as against corruption and state mismanagement. Workers at state firms earmarked for privatisation have called a strike for Thursday.
Karl–Georg Altenburg, JP Morgan's senior country officer for Germany, called for "private creditors to participate" in resolving Greece's problems.
He said an extension of debt maturities would not be sufficient and must be part of a broader programme, hinting at haircuts being taken on bonds.
Source: www.telegraph.co.uk
He warned that if Greee does not get more funding before mid-July, "we face real risk of the first unorderly default within the eurozone".
Jean-Claude Trichet, the president of the ECB, and other senior directors at the central bank have stressed that forcing banks and other private investors to take losses on Greek public debt could devastate the country's banking sector and possibly wreak havoc across the eurozone.
The ECB could accept a voluntary rollover of Greek public debt by banks to give Athens breathing space, but Mr Schaeuble wants "a bond swap leading to a prolongation of the outstanding Greek sovereign bonds by seven years".
A bond swap is likely to be considered a "credit event" by ratings agencies and put Greece in de-facto default, in which case the ECB would not be able to accept Greek bonds as collateral, putting the squeeze on weak Greek banks.
Mr Schaeuble also told coalition members of the German parliament that Greece needs an additional €90bn in a second rescue package that will get the country through 2014. Greece sealed a €110bn aid-for-austerity deal a year ago but has failed to restore confidence in its finances.
Earlier on Wedneday, eurozone finance ministers said in a statement that Greece could return to fiscal sustainability if it strictly implements economic and financial policies agreed with the EU, the IMF and the European Central bank.
The statement came after ministers from the 17 countries using the euro, called the Eurogroup, discussed the conclusions of a report on Greece by a joint mission to Athens of the IMF/ECB and the European Commission.
"We share the view expressed by the Troika that strict implementation will help restore fiscal sustainability, safeguard financial stability and boost competitiveness," the Eurogroup said.
The Greek government warned dissenters in the ruling party yesteday against rejecting an austerity plan agreed under a new international bailout deal, after data showed the depth of the nation's economic crisis.
Prime Minister George Papandreou met senior members of his socialist party to try to stem an outbreak of unrest over the social cost of the bailout before it turns into a full-scale parliamentary rebellion.
Tens of thousands of Greeks are protesting regularly against waves of austerity demanded by the European Union and IMF, as well as against corruption and state mismanagement. Workers at state firms earmarked for privatisation have called a strike for Thursday.
Karl–Georg Altenburg, JP Morgan's senior country officer for Germany, called for "private creditors to participate" in resolving Greece's problems.
He said an extension of debt maturities would not be sufficient and must be part of a broader programme, hinting at haircuts being taken on bonds.
Source: www.telegraph.co.uk
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