Deutsche Bank boss Ackermann doubts Greece will repay loans

The head of Germany's biggest bank has cast doubt on whether debt-wracked Greece will be able to repay billions of euros in loans, prompting Berlin to ride to Athens' defence.

Speaking on ZDF television, Deutsche Bank chief executive officer Josef Ackermann said: "Over time, I am doubtful whether Greece will really be in a position to achieve the repayment of the emergency loans". However, he stressed that Athens had to be propped up because if it fell, it would lead "with great certainty to a spillover to other countries," sparking "a type of meltdown," he added.

The European Union and the International Monetary Fund have cobbled together a rescue package for Greece worth some €110 billion in loans over three years, of which Germany is expected to make available €22.4 billion.

The EU and IMF have also agreed a package worth almost $1 trillion designed to prevent any contagion in the eurozone and allow its members to restore their public finances to health.

A spokeswoman for Chancellor Angela Merkel sought to downplay Mr Ackermann's comments, which helped put the euro and European shares under pressure.

"The federal government does not at the moment see any reason to speculate about such a scenario," spokeswoman Sabine Heimbach told a regular briefing.