Oct. 4 (Bloomberg) -- Euro-area countries unable to pay their debt should be restructured under procedures that would force them to partially renounce some of their sovereign rights, German Economy Minister Philipp Roesler proposed in a letter to the finance ministry, German daily Frankfurter Allgemeine Zeitung reported.
Citing Roesler’s letter, the newspaper said an independent committee should lead negotiations between debtor country and private sector creditors. At the same time, the country would have to submit a credible budget restructuring plan. The newspaper said Roesler, who heads German Chancellor Angela Merkel’s Free Democratic coalition ally FDP, wants his proposals included in the draft contract of the European Stability Mechanism, or ESM.
According to the FAZ, the ESM would only provide financial aid if creditors agree to “take an appropriate share” in the rescue effort and both parties should face material disadvantages if they fail to reach an agreement.
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