German FinMin insists on IOUs as solution to Greece's liquidity problem
Wolfgang Schaeuble has proposed the issue of IOUs in lieu of a bridge loan to Greece, the German finance minister's spokesman Martin Jaeger said on Wednesday. Jaeger denied that these amounted to a 'mini-Grexit,' saying they were a technical tool also used in other cases where liquidity problems existed, as in California.
"The Greek government must pay the country's obligations to ECB on July 20 and continues to delay its payment to the IMF. Greece must first pay the IMF because it is the preferred creditor. The question is how we can create liquidity for these payments. There are several different solutions, such as to issue securities for the domestic obligations in order to release funds for the external obligations. There are also other approaches on how liquidity could be created which are discussed in today's Eurogroup. I do not want to pre-empt the result and our intention is to find a solution," Jaeger said.
