While numerous exponents of the European Central Bank categorically exclude any restructuring of the Greek public debt, the Berlin government is opening up to this possibility. In a letter sent to his European counterparts on Monday, Finance Minister Wolfgang Schaeuble proposed extending the duration of Greek bonds by seven years. The operation is equivalent to what in jargon is called 'reprofiling', ie an indirect lowering of interest rates through the lengthening of maturities. The goal is to give Athens more time to get out of the interest spiral on its debt, which has now reached 340 billion euros.
It is not clear whether the operation would amount to a default for the rating agencies. Furthermore, for many observers, a 'haircut' (the renunciation of part of the nominal value of the bond) would recur later in time: the 'bond swap' proposed by Berlin, in fact, would guarantee liquidity without facing the problem of insolvency .
If an agreement is not reached by mid-July, "we run the risk of seeing the first bankruptcy of the eurozone," Schaeuble wrote in the two-page letter. He then added that the burden of the 'bond swap' will have to be equally shared by governments (through the European state-saving fund) and private investors. Athens' main creditors are French and German banks. Germany's exposure is around 20 billion euros. At the end of 2010, FMS Wertmanagement was exposed to 7,4 billion, Commerzbank 2,9, Deutsche Bank 1,6, Allianz 1,3, just to mention the main institutions.
