German Doubts Force Rethink on Greece

German objections to suffering losses on official loans to Greece have forced the euro zone to explore more complex means of helping Athens cope with its debt mountain.

After almost 10 hours of intense talks on Tuesday night, euro zone finance ministers failed to agree on how fast to cut Greece’s debt pile. They called a further meeting next week to settle differences and release 44 billion euros of long-overdue aid.

The main stumbling block was Berlin’s refusal to back “illegal” cuts to the interest rates on bilateral loans to Greece or return the profits from the European Central Bank’s purchases of Greek bonds, said people involved in the talks.

An alternative proposal involves offering 10 billion euros of extra loans to Athens from the European Financial Stability Fund, the euro zone’s temporary bailout pot. The option is seen as a leading contender for a compromise deal.

Read Full Article from CNBC

- Posted: 2012-11-22 14:48:27

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