Commerzbank CEO: Greek Restructure Is Feasible

The Wall Street Journal

By WILLIAM LAUNDER

FRANKFURT—A restructuring of Greek debt would be "rocky but feasible" for Greece and could include private creditors replacing more than €50 billion in Greek debt backed by the euro zone, Martin Blessing, chief executive of Germany's Commerzbank AG, said Tuesday in an interview with newspaper Frankfurter Allgemeine Zeitung.

Mr. Blessing's comments mark what is probably the first public occasion that a senior-level private banker has pushed for a restructuring of Greek debt, and amid persisting concerns about how to provide a new bailout package for Greece involving private bondholders' support.

Greece has €64 billion of bonds due in the next three years, among other liabilities, and euro-zone leaders want private lenders to voluntarily take on longer maturities in order to give the country more time to address its embattled finances.

Mr. Blessing proposes that private creditors exchange their Greek debt holdings for 30-year bonds with a 30% discount and 3.5% interest rate, according to the newspaper.

The model would need to serve as a "blueprint for Portugal, and if necessary Ireland," Mr. Blessing said. "Continuing as earlier is not possible," he said, in light of contagion fears for Italy and Spain.

Last month, the Chief Executive of Deutsche Bank AG, Josef Ackermann, called for a "quantifiable, sustainable solution" for Greece involving further aid.

Commerzbank is Germany's second-largest listed bank after Deutsche Bank and one of the German lenders most heavily exposed to Greek debt.

Euro-zone governments, and Germany in particular, have lobbied for private-sector creditors to participate in a new Greece aid package in order to share risks between taxpayers and the private sector.

German banks and insurers, including Commerzbank, have already pledged to reinvest proceeds of some of their maturing Greek bonds through a plan first proposed by French banks. But the broader plans to involve the private sector faltered in past weeks on concerns that ratings agencies would consider private-sector participation a default scenario, and as other euro-zone countries failed to quickly outline the extent of their companies' participation in the plan.