Sept. 26 (Bloomberg) -- German Chancellor Angela Merkel may agree to a centralized European bank resolution system if she allies with the Social Democratic Party for her third-term government, Clemens Fuest, head of the ZEW economic research institute, said in an interview.
A so-called grand coalition of Merkel’s Christian Democrats and the SPD, Germany’s two biggest factions, “is likely not to stand in the way of a European resolution authority,” the head of the Mannheim-based institute said by phone. At the same time, Germany probably wouldn’t give up on its demand for disclosure of banks’ legacy assets as a prerequisite, he said.
If the two parties govern jointly, they would probably also ease the terms of aid loans made to Greece to stem the euro-area debt crisis by extending maturities and lowering interest rates, Fuest said.
To contact the reporter on this story: Birgit Jennen in Berlin at firstname.lastname@example.org
To contact the editor responsible for this story: James Hertling at email@example.com