Germany's financial institutions will contribute €3.2 billion to a fresh Greek rescue, the details of which still have to be finalised, German finance minister Wolfgang Schaeuble said today.
The banks and insurers involved in the deal agreed to roll over at least their Greek debt holdings that mature by 2014, Mr Schaeuble said. The bulk - or 55 per cent - of the €10 billion in German hands mature after 2020, he added.
"This concerns debt maturing by 2014 of about €2 billion. Added to this are German bad banks ... which we will ask to contribute, which have debt maturing of €1.2 billion, so that we expect maturities of €3.2 billion in total," Mr Schaeuble told a news conference, stressing that German-held Greek debt maturing by 2014 was "relatively limited".
"This is the number we'll feed into the European process," he added after meeting with the heads of top German financial institutions.
Euro zone policymakers are working on a second assistance package for Greece of a similar magnitude to last year's €110 billion bailout and want private bondholders' involvement to account for just over a quarter of that.
But some experts remained sceptical that the German financial sector was taking on a large enough burden out of the €30 billion sought from private creditors.
French banks and insurers have the biggest exposure among foreign holders of Greek debt. Greek banks have little choice but to roll over their holdings.
Mr Schaeuble said the deal with private debt holders had not been finalised but he was confident a solution would be agreed on Sunday, when euro zone finance ministers meet in Brussels.
He added it was not crucial how this contribution would be reached, but that it would be achieved.
"We are not completely done with the finalisation. Work will be done today and tomorrow," said Josef Ackermann, chief executive of Deutsche Bank, Germany's largest lender, after the meeting.
Deutsche Bank is likely to contribute less than €1 billion, while Commerzbank, Germany's second-biggest lender, is likely to contribute far less than €1 billion, sources said.
Landesbank Baden-Wuerttemberg would help out with less than half a billion, another source said.
French banks have reached an outline agreement to roll over holdings of maturing Greek bonds as part of a wider European plan to avoid a sovereign default. Politicians and bankers are confident it can be adopted without triggering a default or a payout on credit insurance.
Reuters