By Brian Parkin and Rainer Buergin Feb. 26 (Bloomberg) — Germany is considering buying Greek bonds through state-owned lender KfW Group, German lawmakers said today. KfW is preparing measures that are part of a European plan to grant Greece as much as 25 billion euros ($34 billion) in aid should the need arise, said four lawmakers, who spoke on the condition of anonymity because the information is confidential. KfW’s purchase of Greek bonds, backed by German government guarantees, would be an emergency measure as it risks inviting investors to speculate against other euro region countries, the lawmakers said. No decisions have been taken yet, they said. Greece needs to raise 53 billion euros this year and faces more than 20 billion euros of bond redemptions by the end of May, according to data compiled by Bloomberg. Greece has the cash it needs until the middle of March, Prime Minister George Papandreou told the British Broadcasting Corp. on Feb. 21. EU leaders ordered Greece on Feb. 11 to get the 27-nation bloc’s highest budget deficit under control and promised “determined” action to protect the euro, without offering specific steps to help Greece handle its debt load. EU finance ministers who met on Feb. 15 and 16 also didn’t give specifics. An official from the Berlin-based Finance Ministry presented options available to Germany and other euro-region nations in a briefing of the German Parliament’s Budget Committee yesterday, according to lawmakers who attended the meeting. No decision has been made on the options, they said. Assistance to Greece should flow through the International Monetary Fund, the most suitable body to offer financial help that’s tied to stringent conditions, the lawmaker said. The IMF should provide more than technical assistance, the lawmaker said, citing aid given to Hungary and Baltic states as examples. A lawmaker who’s on the budget committee said KfW is the vehicle Germany would use to help Greece. Germany’s share in the potential rescue effort would be around 5 billion euros, a fifth of the euro region total, lawmakers said. To contact the reporters on this story: Brian Parkin in Berlin at bparkin@bloomberg.net ; Rainer Buergin in Berlin at rbuergin1@bloomberg.net .
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Germany Considering Buying Greek Bonds Through State’s KfW, Lawmakers Say
