In a SPIEGEL interview, Allianz CEO Michael Diekmann discusses the participation of private creditors in a new bailout for Greece, the German insurance giant's contribution to the aid package and his proposal for a long-term solution to Athens' problems.
SPIEGEL: Mr. Diekmann, the financial services industry is prepared to contribute to the new bailout package for Greece. How voluntary is this contribution?
Diekmann: It needs to be voluntary enough for rating agencies and auditors to accept it. If it isn't a voluntary contribution, it could lead to massive write-downs for the entire Greek portfolio. Then we won't simply be talking about the tranches from 2011 to 2014...
SPIEGEL: …which will have to be rescheduled in the current bailout package. The private sector is supposed to be contributing €2 billion ($2.9 billion). How much is Allianz contributing?
Diekmann:We're talking about a financial commitment from the Allianz Group of around €300 million through 2014.
SPIEGEL: But what company boss really parts with money voluntarily?
Diekmann: You can only willingly do that if your receivables are clearly more secure after the bailout than they were before.
SPIEGEL: And will that be the case in future?
Diekmann: You could say that any contribution that defuses the overall situation is ultimately an improvement. But I wouldn't go as far as that. You see, we bear considerable responsibility. Ultimately we aren't putting up our own money but rather the money of our policyholders. That's why there has to be a realistic chance that the money will be paid back.
SPIEGEL: And if things go wrong, the taxpayer is on the hook?
Diekmann: That's the situation we're in now. At the moment, no private institutional investor would invest money in Greece, because the country is sitting on a mountain of debt which is getting bigger, not smaller. What's more, economic output is declining. This is why debt is being offloaded to the European Central Bank or to institutions financed by the taxpayer. We need to change that. Read more.
