BERLIN (MNI) – The German Finance Ministry is preparing a debt
buy-back program for Greek sovereign bonds in the secondary market,
German weekly Der Spiegel reported over the weekend, without citing its
sources.
According to the magazine, Greece could borrow money from the
Eurozone’s permanent bailout fund, the European Stability Mechanism
(ESM), to buy back its own debt. On average, Greek bonds trade at some
25% of their face value. Buying E10 billion of Greek bonds would, thus,
reduce Greek debt by E40 billion, Der Spiegel wrote.
In order to reach this rate, talks are to take place with investors
to make sure they would actually accept such a price for the Greek bonds
they are holding. The German Finance Ministry hopes that after this
operation Greece will be almost able to fund itself in capital markets
again, Der Spiegel reported.
The parliamentary leader of German Chancellor Angela Merkel’s
center-right CDU/CSU bloc, Volker Kauder, told German ARD television in
an interview aired Sunday that the government will wait for the report
on Greece by the troika — comprising the European Commission, the
European Central Bank and the International Monetary Fund — before
making any decisions on Greece.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@mni-news.com
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