Deutsche Bank Chief Doubts Greece Can Repay its Debt
5/14/2010 9:52 AM EDT
Deutsche Bank chief Josef Ackermann has told German TV channel ZDF that he doubts Greece will be able to undertake the steps necessary to repay its debt in full.
"Over time, I doubt that Greece will be in a position to muster up the economic wherewithal" to fully pay back its debt, Ackermann said. It would take "incredible effort," he added. Greece must be stabilized and the "risk of contagion limited or reduced," he said. Spain and Italy are strong enough to weather the storm, he continued, though he said it would be "slightly more difficult" for Portugal.
He said the EU had no option but to bail out Greece. Had Greece been an isolated incident, then, perhaps, doing nothing would have been an option, however "Spain, to a certain extent Italy and Portugal" have "comparable imbalances," so inaction was not an option. Ackermann said the hope is that the almost $1 trillion in loans and guarantees won't be needed, but that they are there to strengthen Europe's balances if needed.
Ackermann joked that the Swiss franc is probably the safest currency right now, but said he believes "the euro is fundamentally strong". Even with Eurozone's current debt levels, it's in considerably better economic shape "than, for example, the United States, or England", he said. |
