Here is a novel idea…

Indebted countries selling parts of themselves to stave off bankruptcy. A Greek island, anyone?

German Officials: Greece Can Sell Islands to Cut Debt
Thursday, 04 Mar 2010 08:29 AM

Greece should consider selling some of its islands as one option to reduce debt, two members of the German parliament in Chancellor Angela Merkel’s center-right coalition said.

Josef Schlarmann, a senior member of Merkel’s Christian Democrats, and Frank Schaeffler, a finance policy expert in the Free Democrats, were quoted on Thursday as saying that selling islands and other assets could help Greece out of its crisis.

“Those in insolvency have to sell everything they have to pay their creditors,” Schlarmann told Bild newspaper. “Greece owns buildings, companies and uninhabited islands, which could all be used for debt redemption.”

Greece has launched an austerity program designed to secure European help to tackle its crippling debt burden. Opinion polls show Germans are overwhelmingly against taxpayers bailing out Greece.

Greece’s deficit was 12.7 percent of GDP in 2009, well ahead of the EU’s 3 percent of GDP limit.

Merkel will meet Greek Prime Minister George Papandreou in Berlin on Friday.

“The chancellor cannot promise Greece any help,” Schaeffler told Bild in a story under the headline: “Sell your islands, you bankrupt Greeks! And sell the Acropolis too!”

“The Greek government has to take radical steps to sell its property — for example its uninhabited islands,” Schaeffler told Germany’s best-selling daily newspaper.

Greek Deputy Foreign Minister Dimitris Droutsas was asked about the idea in an interview with ARD TV.

“I’ve also heard the suggestion we should sell the Acropolis,” Droutsas said. “Suggestions like this are not appropriate at this time.”

Germans have had an allergic reaction to reports their country may be part of a bailout for Greece. Europe’s biggest economy itself is only just creeping out of its worst post-war recession.