Greece's Prime Minister George Papandreou Willing to Step Down

Category: World / Jun 15, 2011 2:26PM EDT
Greece's Prime Minister George Papandreou Willing to Step Down The Greek government is under pressure to qualify for a desperately needed 12 billion euros of aid next month. Longer term, Greece needs a second bailout. But France and Germany are divided over how the bill should be paid, sending German government bonds higher on the uncertainty. Baader Bank trader, Robert Halver. (SOUNDBITE) (English) TRADER WITH BAADER BANK, ROBERT HALVER SAYING: Time is running out for Greece, I guess and that's not a good sign, not good for the markets. Markets are not keen to have this high kind of uncertainty, that's why evenFrance and Germany, in former times always able to come up with solutions for even the biggest problems, they should join together and they should have a common solution to get rid of the Greek debt problems. At issue is whether private stakeholders should voluntarily - or involuntarily take on the burden of Greece's debt. Germany wants Greek debt holders to swap their bonds for new ones that will mature in seven years, giving Greece more time to reduce its 330 billion euro debt. But the ECB fears this would cause havoc on the markets - and ratings agencies warn that a bond swap would be viewed as coercive, and trigger a default. ECB governing council member, Mario Draghi. (SOUNDBITE) (English) EUROPEAN CENTRAL BANK GOVERNING COUNCIL MEMBER, MARIO DRAGHI SAYING: The ECB is not in favour of restructuring or haircuts, we should exclude all concepts that are not purely voluntary or that have any element of compulsion. The ECB and France favour a softer approach - encouraging bond holders, possibly through incentives, to buy new Greek debt. Germany's finance minister says a decision will be made on June 20. Ministers pick up their discussions in Luxembourg on Sunday.