German Deputy Fin Min: Good Chance of Eurogroup Deal But No Greek Haircut

The Wall Street Journal, November 26, 2012. Copyright

© 2012 Dow Jones & Company, Inc. All Rights Reserved.

BERLIN–German Deputy Finance Minister Steffen Kampeter sees a "very good chance" of an agreement on Greece’s bailout program at the meeting of international creditors in Brussels later Monday, but said his government continues to oppose a haircut on publicly held Greek sovereign debt.
 

"We don’t believe in the trust-creating effect of a haircut," Mr. Kampeter said Monday in Berlin. A row of other instruments, involving interest rates and granting extra time, is on the table for the meeting of Greece’s international creditors later Monday, the minister said.

His expectation is that a deal will be reached at Monday’s meeting of the European Commission, euro-zone finance ministers, the European Central Bank and the International Monetary Fund, which can be delivered to the German Bundestag for parliamentary approval "and in the next week we should be on track."
 

Mr. Kampeter said that at the moment he doesn’t view as necessary further austerity measures by Greece, other than those already agreed.
 

"Greece has delivered, now it’s Europe’s turn to deliver," Mr. Kampeter said at a Levy Economics Institute conference in Berlin. He added that the IMF is "on board."
 

Speaking about a readjustment of labor costs in the euro zone, the minister expressed concerns about rising German labor costs in the medium term.
 

"We are losing competitiveness," Mr. Kampeter told the conference.