The leaders of Germany and France said on Friday that they were united behind a new aid package for Greece that would include voluntary private sector participation on the basis of the so-called "Vienna Initiative."
German Chancellor Angela Merkel said this approach, based on the 2009 agreement by banks to maintain their exposures in central Europe at the height of the financial crisis, was a "good foundation" for a Greek deal.
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After reports on Thursday that Germany wanted to wait until September to seal a new aid deal for Athens given disagreements over the role of the private sector, Merkel said: "The quicker we get a solution the better." "The Vienna Initiative ...is a good foundation and I believe that we can move forward on this basis," she told reporters at a joint news conference with French President Nicolas Sarkozy.
Her backing of the Vienna solution represented a shift for Berlin, which earlier this month had said in a letter to its euro zone partners that they wanted a more far-reaching bond swap to ensure fair burden-sharing from the banks that hold Greek sovereign debt.
"We have to move forward on this now and I think it makes sense to involve the private sector. This is important for us," she said.
Sarkozy listed four criteria that must be met to ensure a role for the private sector, including that it be voluntary, avoid creating a "credit event," have the backing of the European Central Bank and be sealed rapidly.
"We want to go as quickly as possible without fixing a date," Sarkozy said. "Since September is not as quickly as possible and we may have other concerns in August and we are in the second half of June, you see what I mean."