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German-French discussions on Greece without any concrete result



The German Federal Chancellor Angela Merkel and French President Nicolas Sarkozy gave a short meeting at the chancellery in Berlin, known to have reached agreement on a joint approach to Greece’s public finances and thus save the euro. But if you expect a well thought out strategy with clear targets for action is wrong. Much remains vague, it was merely decided that private banks and insurance companies continue to the Greek state to voluntarily extend credit. This can not be understood as being in compliance with Mrs. Merkel’s avowed aim to pay not only the taxpayers of the need to rescue Greece, but also the private banks and insurers. But still is by the German and French government officially requested no “haircut”: This would mean that private lenders would have to give up a large part of their claims against Greece. This would affect mainly large German and French banks.

Should look exactly like this “voluntary” support financial intermediation remained unclear. With rational economic behavior in favor of the owner as it was not necessarily agree, if banks and other financial institutions are now beginning to buy large-scale Greek government bonds and to grant new loans Greece. Only an invitation from the German and French leaders should be here as much too little security. Merkel and Sarkozy also reacted accordingly curt demands on how this appeal to help Greece in practice. Instead, Mrs Merkel repeated her passionate commitment to the euro, and stressed that his life is our priority. The question of how this should be done in the case of Greece is so exciting, the possibility of a second aid package of around 120 billion euros is still in the room.