Germany considers debt buyback of Greek debt

Germany’s finance ministry is considering a debt buyback as a possible way of reducing Greece’s huge debt pile, which threatens to rise well above a target level of 120% of GDP by 2020, according to German news magazine Spiegel.

The Greek government could borrow money from the eurozone’s permanent bailout fund and use this to buy back its own debt, which at present trades at around 25% of its face value.

Buying just €10m worth of Greek bonds could reduce the debt mountain by €40m, Spiegel wrote. Talks would have to take place with debt-holders to see if they would accept such a price for their Greek paper.