German banks join Greek debt plan

1 July 2011

Banks in Germany have signed up to a debt scheme aiming to help crisis-hit Greece.

The country's finance minister Wolfgang Schauble has suggested the nation's lenders are likely to roll over around €3 billion ($4.35 billion) of Greek arrears.

German banks have been told by the administration in Berlin that they need to identify around €3.2 billion of debt that is scheduled to be repaid by 2014.

By allowing such funds to be delayed, the German institutions would be giving the Greek government considerable leeway and reducing the likelihood that it will have to default.

Mr Schauble commented: "I am glad that the representatives of the German finance industry have said they are prepared to participate in a second aid programme for Greece."

The commitment comes after Guy Debelle, assistant governor at the Reserve Bank of Australia, said lenders in Australia are currently safe from the Greek debt crisis because there exists plenty of collateral in the local market to counter any crunch should a 'liquid event' surface.

By Claire Archer

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