The German government and banks have reached an agreement on the contribution to the next Greek bailout package.
A total of $4.6 billion will come from a combination of good German banks and ones that have the worst loan problems.
This will contribute to the total bailout package of about $159 billion from various eurozone members.
Total Greek deficit, however, is around $435 billion.
The bailout will help, but it won’t stop Greece from hurting.
The French plan consists of changing 50% of Greek debt into new, longer-term bonds, which may last as long as 30 years.
According to Deutsche Bank (NYSE: DB) CEO Josef Ackermann, “We are taking the French draft as a basis but will build modifications and are very confident we will find a solution that will give satisfactory answers to all participants.
While over half of the Greek bonds in Germany are not due for repayment until 2020, banks are delaying repayment on the debt due in 2014.
It is speculated that around $1.5 billion of the $4.6 billion will come from Deutsche Bank. Commerzbank (PINK: CRZBY) will offer less than $1.5 billion, and Germany’s “bad banks” will give about $1.7 billion.
This week, the Greek parliament voted 155-136 to approve the new austerity plan that was required for the second bailout to take place. It’s time for the rest of Europe to hold up their end of the deal, and despite some grumblings, they know what they have to do.