A German cabinet minister rejected demands to involve the European Central Bank directly in efforts to reduce Greece's debt as international pressure is growing on the ECB to make a significant contribution to restructuring Athens' debt by accepting a haircut on its huge cache of Greek bonds.
"This is not currently an issue for us," said German Economy Minister Philipp Rösler in an exclusive interview with Dow Jones Newswires and The Wall Street Journal, when asked whether the ECB should be involved in Greece's debt restructuring. "The current discussion is primarily about private-sector involvement. European states and their taxpayers already make a massive contribution to Greece's restructuring process though their support efforts."
Mr. Rösler was speaking as a crucial deal to restructure more than €200 billion ($262.9 billion) of Greek bonds held by private investors appeared to be held up by squabbling between Germany and the International Monetary Fund over the involvement of so-called official creditors. The IMF, which together with the European Commission and the ECB forms the troika overseeing the Greek rescue, is urging the ECB to also accept a write-down on the estimated €40 billion of Greek bonds that it holds. Germany, at least for now, is refusing to throw the ECB-held bonds into the discussion.
Greek Finance Minister Evangelos Venizelos added to the pressure on the ECB on Thursday, when he suggested that Greece could not reach its goal of lowering its debt to 120% of gross domestic product by 2020 without the involvement of the ECB in the debt restructuring. "The European Central Bank has to take part," he told a meeting of Socialist lawmakers in Athens.
During a wide-ranging interview in his office in central Berlin, Mr. Rösler expressed confidence that Greece could master its crisis and remain in the euro zone, but demanded that Athens keep up its part of the bargain in exchange for European assistance. He insisted that Germany and Europe are ready to provide Athens with "every form of technical assistance, advice and support on the ground" to revive the country's battered economy, he said. Mr. Rösler last year launched an initiative to create a Greek development bank, modeled after Germany's Marshall Plan-era Bank for Reconstruction and Development. But Mr. Rösler also turned up the pressure on Athens to fully implement budget reforms it agreed to in exchange for a €130 billion European aid package. He said easing the pressure on Greece now to implement economic and budget reforms would send the wrong signal. "The aim is still that the agreed measures not just remain on the paper, but are implemented in a timely fashion," he said. Mr. Rösler appeared to distance himself from a German proposal to impose an external budget czar in Athens to oversee Greece's reforms. He said the Greek budget should remain the responsibility of the Greek parliament. "But it is completely legitimate to accompany financial aid with a clear and strict monitoring process," he said. "We owe that to taxpayers." Read more. (Subscription required.)
