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Allianz’s Achleitner Suggests Voluntary Swap for Greek Bonds

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July 18 (Bloomberg) -- Allianz SE finance head Paul Achleitner suggested a voluntary swap of Greek bonds to enable the country to better pay its bills.

“I’m not opposed to a restructuring of Greek debt, but it has to be done on a voluntary basis,” Achleitner, 54, told German newspaper Financial Times Deutschland in an interview. His comments were confirmed by Michael Matern, a spokesman for Allianz, Europe’s biggest insurer.

Achleitner proposed that holders of Greek debt would get an offer to swap their securities at 75 percent of their value for new 10-year bonds guaranteed by the European Financial Stability Facility. In the interview with FTD, he reiterated his proposal to introduce a European monoline insurer for sovereign debt.

Leaders of euro-area countries are due to meet July 21 in Brussels to discuss a second aid package for Greece after last year’s 110 billion-euro ($156 billion) bailout failed to stop the spread of the debt crisis. German Chancellor Angela Merkel yesterday renewed her call for private investors to help rescue debt-strapped Greece, saying it’s in their interest to get the country “back on its feet.”

An uncontrolled default of Greece or the U.S. would be the worst case, Achleitner said, adding that both scenarios are considered very unlikely by Allianz.

U.S. President Barack Obama continued to reach out to lawmakers in both parties this weekend in search of a deficit-cutting deal as the Aug. 2 deadline for raising the U.S. debt ceiling looms.

Allianz, as well as Newport Beach, California-based Pacific Investment Management Co., which is part of the insurer’s asset-management unit, won’t speculate against the euro, Achleitner said, adding that he doesn’t expect the euro-zone to break up.

To contact the reporter on this story: Oliver Suess in Munich at osuess@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Edward Evans at eevans3@bloomberg.net

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