No Greek debt writedown in next rescue package - ECB's Asmussen
November 26, 2012 3:14 AM EST
A write-down on Greek debt should not be part of the country's next rescue package, European Central Bank board member Joerg Asmussen told Germany's Bild newspaper ahead of Monday's euro zone group meeting.
"We need a package of measures to close the financial gap that will include a substantial reduction of the interest rates and a debt buy-back by Greece," Asmussen said in an interview to appear on Monday. "A hair cut does not belong to that package."
Asmussen said, in excerpts of the interview released on Sunday, that he hoped euro zone finance ministers would reach a speedy decision.
"I very much hope that the euro zone group will reach a political decision on Monday so that the next loan instalment can be released. For that the financing gap for the next two years has to be closed by the other euro zone countries.
"Everyone must show a willingness to move for that to succeed," he said.
Euro zone finance ministers, the ECB and the International Monetary Fund have met twice in the past two weeks but failed both times to agree on the next steps for Greece and how to bring its debt level down to a sustainable level.
They will meet again on Monday.
Germany, the EU's biggest economy and paymaster, has led resistance within the euro zone to calls from the IMF and others to accept losses on their Greek debt holdings and give Greece, entering its sixth year of recession, a chance to grow again.
Greece's international creditors will hold crunch talks next Monday - their third meeting in as many weeks - to unlock loans needed to avert bankruptcy for the stricken nation.
German Finance Minister Wolfgang Schaeuble reiterated on Thursday his official view that a writedown of Greek debt by euro zone governments would be wrong and illegal. But two sources told Reuters he had signalled a more flexible attitude at a small gathering of ministers in Paris on Monday, before the failed talks in Brussels on Tuesday.
Members of Chancellor Angela Merkel's centre-right coalition have said granting Greece debt relief would undermine the reform drive in other struggling euro zone countries such as Portugal.
Schaeuble said on Wednesday the funding gap could be funded by a mixture of letting Greece buy back its own debt at a discount, tapping ECB profits on Greek bond purchases and lowering interest rates on government loans to Athens, though not below the cost to lenders.
(Reporting By Erik Kirschbaum; Editing by Sophie Walker)
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