German Chancellor Angela Merkel and French President Nicolas Sarkozy have united behind the idea of providing further assistance to Greece and that private investors should participate in the scheme on voluntary basis.
The two leaders said at a joint news conference on Friday that the private sector participation could happen on the basis of the so-called «Vienna Initiative».
Merkel said this approach, based on the 2009 agreement by banks to maintain their exposures in central Europe at the height of the financial crisis, was a «good foundation» for a Greek deal and dispelled rumors earlier this week that Germany wanted to wait until September before making a decision.
"The Vienna Initiative ... is a good foundation and I believe that we can move forward on this basis,» she said.
Her backing of the Vienna solution represented a shift for Berlin, which earlier this month had said in a letter to its eurozone partners that they wanted a more far-reaching bond swap to ensure fair burden-sharing from the banks that hold Greek sovereign debt.