Eurogroup chief Jean-Claude Juncker lent support to a Franco-German proposal to set aside bailout funds for Greece in a special account to cover interest payments on its massive debt.
The Luxembourg prime minister told Berlin’s RBB Inforadio that the idea, put forward on Monday at a meeting with Chancellor Angela Merkel of Germany and French President Nicolas Sarkozy in Paris, was worthy of consideration.
“As always, the devil is in the details but the idea to try to ensure that our Greek friends also pay back their debts by means of a special account is not an absurd one,” he said.
Juncker said that the idea now needed to be fleshed out with further detailed proposals.
Sarkozy suggested an escrow account be created, into which part of bailout funds would be funnelled specifically and only to service interest on Greek debt.
Such an arrangement may help conclude a deal with private creditors on cutting 100 billion euros ($130 billion) off Greece’s debt, but Athens has been very sensitive to any moves it sees as infringing on its fiscal sovereignty.
Merkel said she was “favourable” to such an idea, but called for a rapid resolution to the crisis, adding: “I don’t really understand the interest in letting more time go by. Time is pressing.”
(source: AFP)
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