BERLIN(Reuters) - Germany's finance minister will meet the chiefs of the country's top insurers and banks on Thursday to discuss a French proposal detailing private sector involvement in a second Greek bailout package.
French banks, the most exposed to the Greek debt crisis, have reached an outline agreement to roll over holdings of maturing Greek bonds as part of a wider European plan to avoid sovereign default.
"We think this French proposal serves as a good basis," Deputy Finance Minister Joerg Asmussen said in a speech he to a real estate conference in Berlin.
"On this basis, the German finance minister will hold talks with the chief executives of the major German banks and insurers on Thursday, June 30, in Berlin," he said.
Under the French proposal, banks would reinvest 70 percent of the proceeds when Greek bonds fall due in 2011-14 and cash out the rest. Of the amount reinvested, 50 percent would go into the new 30-year bonds and 20 percent would go into zero-coupon AAA bonds with deferred interest.
They would pay annual interest of between 5.5 percent and 8 percent, tied to Greek GDP growth.
In a Sunday interview with a German weekly newspaper, Finance Minister Wolfgang Schaeuble said protecting their Greek investments should be reason enough for German banks and insurers to participate voluntarily in an aid deal, so there was no need for additional incentives.
German private sector banks, which quantify their exposure to Greece at some 10-20 billion euros, have called for the state to guarantee their risk if they allow a debt rollover.
German insurers estimate their holdings are substantially less than 6 billion euros, or 0.5 percent of the 1.2 trillion euros in insurers' invested assets.
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