Ack­er­mann ‘ab­so­lutely’ against de­fault by Athens

Kathimerini English - - Business & Finance -

Greece should “ab­so­lutely not de­fault” and the Euro­pean Union needs to pro­vide more aid to the coun­try if re­quired, ac­cord­ing to Deutsche Bank AG Chief Ex­ec­u­tive Of­fi­cer Josef Ack­er­mann. “We have to help them,” Ack­er­mann, 63, the head of Ger­many’s big­gest bank, said in an in­ter­view at the St Peters­burg In­ter­na­tional Fo­rum. “If they need more funds, we have to pro­vide for them.” Ack­er­mann’s warn­ings came as Euro­pean of­fi­cials tried to reach an agree­ment on a sec­ond Greek res­cue to avoid the euro area’s first de­fault. Chan­cel­lor An­gela Merkel yes­ter­day re­treated from Ger­man de­mands that bond­hold­ers be forced to shoul­der a “sub­stan­tial” share of a Greek res­cue, say­ing she’ll work with the Euro­pean Cen­tral Bank to avoid dis­rupt­ing mar­kets. A debt rollover mod­eled on the so-called Vi­enna Ini­tia­tive was a “good ba­sis” for en­rolling in­vestors vol­un­tar­ily to help Greece, Merkel told re­porters in Ber­lin yes­ter­day at a joint press con­fer­ence with French Pres­i­dent Ni­co­las Sarkozy. The euro strength­ened and Greek bonds ral­lied as Merkel and Sarkozy sig­naled a rec­on­cil­i­a­tion be­tween Ger­man calls for in­vestors to help bail out Greece with warn­ings from the ECB and France that a com­pul­sory move risked trig­ger­ing a spread of the cri­sis. At­ten­tion now shifts to Athens, where Prime Min­is­ter Ge­orge Pa­pan­dreou over­hauled his Cabi­net to en­sure the pas­sage of aus­ter­ity mea­sures needed for a bailout. Ack­er­mann, speak­ing in a panel dis­cus­sion in St Peters­burg, said Europe will do “what­ever is nec­es­sary” to save the euro. In ad­di­tion to Greece rais­ing taxes and cut­ting its deficit, an eco­nomic pro­gram is nec­es­sary to help the coun­try over­come its debt prob­lems, he said. (Bloomberg) against an in­volve­ment of the pri­vate sec­tor,” he said. The most im­por­tant thing was en­sur­ing Greece had enough liq­uid­ity to meet its obli­ga­tions while it im­posed a pack­age of re­forms that could help it re­gain ac­cess to cap­i­tal mar­kets. Asked if a “hair­cut” for Greek debt could be avoided in the long run, he said: “I am not ex­clud­ing this pos­si­bil­ity. Prob­a­bly one year ago it would have been ac­cepted, to­day not.” If af­ter a year of in­con­clu­sive dis­cus­sions of­fi­cials de­cided on a hair­cut now it would lead to “mas­sacre of Ire­land and Por­tu­gal and maybe other coun­tries,” he said. Ghiz­zoni, head of the big­gest lender in Cen­tral and East­ern Europe, said Greece must not be al­lowed to de­fault. “A de­fault of Greece could have a very neg­a­tive im­pact on the Euro­pean econ­omy, start­ing from the weak­est coun­tries like Por­tu­gal and Ire­land,” he said. day at 274 ba­sis points – close to a record set late last year. Ris­ing con­ta­gion con­cerns were also ev­i­dent in a Span­ish bond auc­tion on Thurs­day. Though it went rel­a­tively well in terms of de­mand, the av­er­age rate de­manded for the 15-year bonds spiked to a euro-era high of just over 6 per­cent. (AP)

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