ATHENS (Reuters) - Germany is optimistic about the outcome of a bond swap deal aimed at slashing Greece’s towering debt pile, Germany’s foreign minister said during a visit to Athens Sunday which he said brought a message of solidarity.
Pressure is mounting on Athens to complete a deal with private bondholders to cut its debt to more sustainable levels and convince its international lenders to keep giving it the cash it needs. Without aid, Athens would default in March when it has to redeem 14.5 billion in bonds.
Foreign Minister Guido Westerwelle’s visit came two days after talks on private sector debt modification broke down, pushing Athens closer to default.
“Discussions (on the bond swap) are difficult but with good faith they will reach a good result,” Westerwelle said after a meeting with his Greek counterpart Stavros Dimas.
“It is very important that we give negotiations and packages a realistic chance,” he said.
Germany has repeatedly urged Greece to meet the fiscal conditions set out by its lenders - the European Union and the International Monetary Fund - but Westerwelle said Germany would stand ready to help.
“Germany will help so that there will be better days ahead,” Westerwelle said, speaking through an interpreter. “My visit brings a message of solidarity.”
Friday, Standard & Poor’s downgraded the credit ratings of nine euro zone countries, stripping France and Austria of their coveted triple-A status but not EU paymaster Germany.
“It is time for Europe to prove it is able to tackle the issue of credit ratings agencies,” Westerwelle said.
Reporting by George Georgiopoulos; Editing by Karolina Tagaris and Peter Graff