German Finance Minister Wolfgang Schäuble has proposed a compromise Greek rescue plan to resolve differences with the European Central Bank (ECB) and the European Commission, Der Spiegel magazine reports in its upcoming Monday edition.

The new Schäuble plan proposes a beefed-up version of the EU's temporary bailout mechanism. It would boost the lending capacity of the so-called Emergency Financial Stability Facility (EFSF) to 440 billion euros ($629 billion), effectively doubling the amount of guarantees EU member states provide the fund.

Germany's share of guarantees would climb to 246 billion euros from 123 billion euros.

ECB opposed to Greek default

Greece would then be able to borrow more to issue government bonds, in addition to receiving a second emergency aid package worth some 80 to 120 billion euros, which is currently under discussion.

Germany changes tack on Greek debt solution

The Schäuble plan is an attempt to resolve a dispute with the ECB, which, along with eurozone leaders, rejected an earlier plan favored by the German finance minister to swap existing Greek debt for new bonds with longer maturities.

That bailout plan would have included private creditors, like banks, insurance companies and pension funds, in addition to taxpayers.

The ECB has repeatedly warned, however, that such a swap was tantamount to a default and would disqualify Greek bonds as collateral for the central bank's liquidity-providing operations.

The ECB had said that this plan would not reduce Greek debt, and would pose liquidity problems for Greek lenders which, in turn, could spread to Portugal and Ireland.

German Chancellor Angela Merkel and French President Nicolas Sarkozy agreed on Friday to a plan through which private bondholders could volunteer to buy new government bonds to replace ones that matured.

This "rollover" option is favored by the ECB and France because it avoids the risk of rating agencies declaring Athens in default, which would send shock waves through the global financial system.

Calls for unity, real division

As eurozone finance ministers gather in Luxembourg for talks on Sunday on saving Athens from default, Greece's prime minister has urged political parties in his country to forge a "national accord" and back him in a confidence vote.

Greek's Papandreou says he understands the sacrifices the country is making

"I have asked for a renewal of the confidence in the government because the country finds itself at a crucial point," George Papandreou said at the opening of debate on a parliamentary vote of confidence in the new Greek cabinet.

A controversial debt plan, including 28.4 billion euros ($40.6 billion) of fiscal belt-tightening, must be adopted by the end of the month to convince creditor nations, the EU and the IMF to continue Greece's financial aid program.

While the prime minister is calling for politicians to come together, nearly half of Greeks are against planned savings measures brought in to save the economy from bankruptcy, according to a survey published Sunday by weekly To Vima newspaper.

Of those questioned, 47.5 percent were against the new wave of measures.

Author: Gregg Benzow (Reuters, AFP, dpa)

Editor: Kyle James