FRANKFURT: German central bank governor Axel Weber proposed Thursday that government bond maturities be automatically extended for countries that need EU aid so as to spread the default risk among all its creditors. If a country asks for loans from the European Stability Mechanism that is to come into being in 2013, its bond maturities should be automatically extended for three years, Weber said in the daily Frankfurter Allgemeine Zeitung (FAZ). The newspaper reported that the German authorities supported the proposition, which it said would distribute potential losses more widely among those who hold a country's debt and thus make them more manageable. FAZ quoted a finance ministry official as saying: "Our goal is to develop market-adapted conditions that major investors will understand and accept. "The Bundesbank proposition certainly goes in this direction," he said. – Agence France
