German Finance Minister Wolfgang Schaeuble told his country?s Parliament on Friday that MPs had a duty to approve a new aid package for Greece and that private creditors must carry some of the burden.
Agence France-Presse reported that in an impassioned speech to deputies who later approved a non-binding motion in favor of further aid for Greece, Schaeuble underscored «Germany’s responsibility to Europe» and the need to protect the euro.
Schaeuble told the lower house of parliament that a new package was «inevitable» and would establish «a fair distribution of risks between the taxpayer and private creditor,» to send «the message that you cannot simply dump the risk on the taxpayer».
He insisted that Greece must make further painful reforms, and that banks and insurers which hold Greek debt must share the risk with taxpayers.
“If there are doubts about the ability of Greece to pay back its debt and we must win time with a new package, then the participation of the private sector in the solution is unavoidable,» Schaeuble said.
At a Brussels summit on June 23-24, European Union leaders are due to finalise a new rescue package for Greece that officials say will total 120 billion euros until 2014, including 30 billion from privatization receipts and a targeted 30 billion from the private sector.
But he also specified that eurozone finance ministers would set up a working group to hammer out ways to involve private investors in the wake of opposition to the idea by France and by the European Central Bank (ECB).
“In order to find a good solution which the European Central Bank can support, which the ECB must support, we have decided within the Eurogroup to create a working group that will assess the narrow window between involving private investors and seeing potentially negative consequences for financial markets,» Schaeuble said.
He said representatives from the International Monetary Fund, the European Commission and the ECB would join the working group.