Eurozone finance ministers fail to agree on new aid for Greece
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Finance ministers of eurozone countries failed to agree on a new financing plan for Greece at an emergency meeting here on Tuesday, fighting over the degree of private sector involvement in additional rescue for Athens.
"There has been no result," German Finance Minister Wolfgang Schaeuble told reporters after talks in Brussels which ended late Tuesday.
The emergency meeting of eurozone finance ministers had been called to build consensus on the degree of private sector involvement in the new rescue plan for the debt-laden Greece.
Germany, European paymaster, has insisted on significant involvement of private bondholders if further aid to Greece has to be delivered.
Schaeuble said last week that the holders of Greek debt should be forced to extend the maturities of their debt by seven years to prevent a bankruptcy, a move credit rating agencies said may amount to a default.
Germany's position was backed by the Netherlands.
The European Central Bank (ECB), however, warned that any forced involvement of private bondholders would create chaos in the financial markets.
Instead, the ECB, supported by the European Commission and France, is pushing for a plan under which bondholders voluntarily agree to buy new Greek bonds to replace maturing debts, thus giving Greece longer periods to pay back.
Belgian Finance Minister Didier Reynders also warned about the dire consequences of forced involvement of private sector.
"It would be too dangerous to do that. Not only now for Greece and then maybe later for Portugal and Ireland. Otherwise it would not be possible, after such a decision, to turn to the private sector again for financing," he said.
Luxembourg Prime Minister Jean-Claude Juncker, who heads the eurogoup of eurozone finance ministers, said he called the emergency session to examine various options and make preparation for a regular meeting of eurozone finance ministers next Monday.
But the obvious differences mean it would be a very hard job for eurozone finance ministers to hammer out an agreement on new aid for Greece at their next meeting in Luxembourg.
In order to calm the nervous markets, a deal must be found ahead of a summit of European Union (EU) leaders on Thursday and Friday next week.
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