The German finance ministry on Saturday denied it was drawing up contingency plans for a Greek debt restructuring after the Financial Times reported the ministry was studying various options if Athens fails to meet its fiscal targets.
"There have been media reports today regarding German plans for Greek sovereign debt restructuring. These plans have no basis in reality," said Martin Kotthaus, spokesman for Finance Minister Wolfgang Schaeuble, in a written statement sent on Saturday.
Citing people briefed about Berlin's thinking, the FT wrote on Saturday that one plan involved swapping Greek debt at market prices for paper guaranteed by the eurozone, similar to "Brady Bonds" issued by South American countries in the late 1980s.
The other main option, the report said, entailed providing debt relief assistance by buying bonds from investors and then retiring the debt or extending their maturities - a plan akin to the International Monetary Fund's Heavily Indebted Poor Countries (HIPC) initiative.
"The government has long since started preparing for a Greek restructuring," the FT quoted one person briefed as saying. "It's not pushing Greece into this. It knows that none of these plans will work if the Greeks don't want them."
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