Heilmann: ‘Germany needs to take a hardline on Greek debt’

Eurozone finance ministers are at loggerheads over the Greek government's bailout demands

February 12, 2015

Reporting from Finovate Europe, World Finance speaks to Stefan C. Heilmann, Managing Director of IEG Investment Banking Group, on whether a Troika solution is a plausible option.

World Finance: We’re talking about the prospect of Germany playing a large role in shouldering this debt; do you think that is even a wise move?
Stefan Heilmann: I don’t think it’s a real choice. First of all, I believe that the euro as it is today – and also the European Union – needs to stay in place. Including Greece, and everybody else on board. Everything needs to be done to protect that.

World Finance: It sounds like you accept that there are certain inevitabilities in terms of Germany’s role in restructuring and moving forward from sluggish economic times; are you at all worried about over-exposure of your economy to the situation in Greece?
Stefan Heilmann: Well absolutely! I think somebody has to pay the bill of overspending over a long, long, long time; whether it’s Greece or Europe.

I believe that the euro as it is today – and also the European Union – needs to stay in place

You have to treat this more entrepreneurially. Once you provide debt, whether that’s to Greece or to anybody else, and you can’t repay: I think that’s a restructuring case.

It’s a quid pro quo to basically give the European Union enough certainty that you actually will be able to in the future to come up for all your obligations: and that means restructuring measures. And I think that’s something that the Greeks will have to demonstrate to the Europeans, to the Germans, to all the taxpayers actually – to you and me – whether that’s convincing. If that’s the case, I think the Germans should support that; the Europeans should support that.

And I think that’s the process going on for the moment. I think there are too many extremes in the negotiations: you’re saying, ‘I’m not bailing out, I’m not doing this, I’m ending a pact;’ I think that’s not going to take us anywhere. So I think we have to go back on the table, sit down constructively: what are the measures to be taken to restructure and help the Greek government – and in particular the population and economy – to go forward.

World Finance: Greece’s left-leaning finance minister’s already putting out some innovative solutions to this situation in his country: they don’t necessarily include a Troika method, which is what you seem to be suggesting. Do you think that your country’s finance minister should hold hard to the idea of encapsulating all of these entities in any sort of long-term solution?
Stefan Heilmann: Well, I’m not implying that I’m a pro for the Troika; I’m not also agreeing that the finance minister has a solution, because he hasn’t presented one yet. He has told us a lot of what he won’t accept…

World Finance: And lot’s of emotion behind!
Stefan Heilmann:…and a lot of emotions! So I don’t really know what the plan is of the Greek government.

World Finance: There is none! Right?
Stefan Heilmann: I have no idea. So it’s hard to discuss that.

It’s probably a wiser idea to rethink the people to be involved in the restructuring process. So I’d rather say: it’s a good idea to break up the Troika, and rethink what are the most efficient bodies and people involved in that process.

World Finance: Of course, you’re a banking executive; how do you advise your clients to deal with the prospect of being a lender to one of the most destabilised countries in the European Union?
Stefan Heilmann: Take a summer vacation in Greece, for starters?

World Finance: Right!
Stefan Heilmann: So that’s something that I would advise. I’m a banking executive for internet and technology. So it’s very asset-light industries, and a very booming market.

My clients are not really impacted as much as you would be in energy or manufacturing. I’ve never been asked the question, ‘What’s the impact to my internet, my technology business, because of Greece, because of the European Union?’

Interestingly enough, the US investors ask me very often, ‘What’s the impact on the euro, what’s the impact on currency, what will be the impact in the future, do you think there will be a north and south euro?’ Stuff like this.

It seems that we’re here in Europe, we’re waiting to see what the solutions will be; and the first solution will be that Greece comes up with an idea.

World Finance: And if you could speak directly to your country’s finance minister, what would you tell him to do in the days and months to come?
Stefan Heilmann: Keep a hard line on not letting Greece bail out of their obligations, unless they prove a very constructive way of bringing the country forward; again on a growth path. Not on a savings path, but on a growth path.