Berlin - AFP
The eurozone is preparing for the worst in the Greek debt crisis and will cope even if Athens defaults on its loans, German Finance Minister Wolfgang Schaeuble said in an interview published Sunday. Schaeuble said he and his European counterparts fully expected the Greek parliament to pass a crucial austerity package this week despite massive street protests and opposition resistance, but would manage if it did not. \"We are doing everything we can to prevent a perilous escalation for Europe but must at the same time be prepared for the worst,\" he told the Bild am Sonntag newspaper. In the worst case scenario, Schaeuble said the experience from the 2007-2008 global financial crisis, triggered by the bankruptcy of the US investment bank Lehman Brothers, showed that the world economy could bounce back from a disaster. Related article: Greek deputy PM blasts euro exit talks as \'stupidity\' \"If things turn out differently than everyone expects that would of course be a major breakdown,\" he said about Greece. \"But even in 2008, the world was able to take coordinated action against a global and unpredictable financial market crisis.\" He acknowledged that gross domestic product in Germany, the eurozone\'s biggest economy, fell 4.7 percent as a result -- the worst performance in the postwar period. But he noted the country had since returned to growth. Facts: Greece\'s five-year roadmap Schaeuble nevertheless warned the Greek parliament against failing to pass the austerity package, underlining that it would have a major impact on the stability of the eurozone. \"We would have to quickly ensure that the danger of contagion for the financial system and other euro states is kept in check,\" he said. Debt-wracked Greece has been told by European peers that it cannot hope to continue receiving aid out of a 110-billion-euro ($156-billion) rescue package agreed with the EU and the IMF last year without biting budget reforms and privatisations. The EU wants private creditors -- banks, pension funds and insurers -- to contribute to a rescue in an \"informal and voluntary\" rollover of Greek government bonds whereby investors buy new bonds to replace ones that mature. It fears that if the participation is not seen as voluntary, rating agencies could declare Athens to be in default. Schaeuble insisted it was in private creditors\' \"most basic interest\" to pitch in to help Greece for the sake of market stability. \"I expect precise figures as to how much the private sector in Europe will voluntarily contribute at the special meeting of the Eurogroup (finance ministers from the 17-nation eurozone) on July 3,\" he said. The head of the German federation of private banks, Michael Kemmer, pledged that its members would participate in the aid package but offered no details, in an interview with the daily Neue Osnabruecker Zeitung published Saturday. A report Sunday in the Welt am Sonntag newspaper said Berlin wanted private creditors to extend the maturities on Greek bonds for up to five years while German banks are offering a one-year extension. The federation of private banks could not be reached for comment on the report. A finance ministry spokesman said Saturday that talks were ongoing but noted there was no clear procedure defining how the process would work. The Bundesbank estimates that German banks have 10 billion to 20 billion euros in exposure in the Greek crisis.