Don't miss

Replay


LATEST SHOWS

#THE 51%

Gender equality in the classroom: A delicate balancing act

Read more

FRANCE IN FOCUS

Inside a school for imams

Read more

#TECH 24

MWC 2015: New smartphones unveiled

Read more

IN THE PAPERS

Paris, world tattoo capital

Read more

IN THE PAPERS

'Fair play won't stop Putin - it's time for sterner stuff'

Read more

FOCUS

Russia after Nemtsov: A dying opposition

Read more

EYE ON AFRICA

Boko Haram crisis: Chadian President calls on militants' leader to surrender

Read more

BUSINESS DAILY

Europe on the road to recovery

Read more

YOU ARE HERE

The secrets of fashion design

Read more

Europe

European Commission rules out Greek debt restructuring

Text by News Wires

Latest update : 2011-04-09

Economic and Monetary Affairs chief Olli Rehn (pictured) said Saturday that a restructuring of Greek debt - which has soared to nearly 340 billion euros - was out of the question, despite growing doubt that Athens can meet its fiscal targets.

REUTERS - A restructuring of Greek debt is out of the question, Economic and Monetary Affairs Commissioner Olli Rehn said on Saturday.

German magazine Der Spiegel reported on Saturday that several euro zone finance ministers told European Central Bank President Jean-Claude Trichet in a conference call last week they had doubts if Greece would meet its fiscal targets and suggested Athens should restructure its debt.

“We do exclude (a Greek debt) restructuring. We have a solid plan and we are working on the basis of that plan and it is based on careful analysis of debt sustainability,” Rehn told a news conference, when asked about the German magazine report.

Greek family deals with economic woes

The Der Spiegel report said several finance ministers had said Athens would be unable to meet its fiscal targets and return to the markets for funding next year and asked if a debt restructuring for Greece would be sensible in view of the situation. But Trichet blocked the idea and said he was not willing to discuss it, Der Spiegel said.

Asked to comment on the magazine report, Trichet echoed Rehn’s comments:

“On Greece, I would say we have a plan, that plan has been approved by the international community and approved by the European institutions and we apply the plan.”

Der Spiegel said Rehn had told the EU Commission last week that any idea of a Greek restructuring, if it were to be required, should not be discussed in public but would simply happen at some point.

Der Spiegel said Trichet feared that a restructuring could damage confidence in the entire euro zone and could hit banks holding Greek debt hard.

German Finance Minister Wolfgang Schaeuble viewed Trichet’s concerns about capital markets to be exaggerated and not credible, Der Spiegel said.

In Godollo, Hungary, where EU finance ministers and central bankers met on Saturday for a second day of informal talks, Schaeuble warned against fueling speculation in financial markets. Speculation over solutions to Greece’s problems when it has to return to normal debt markets next year was not helpful, he said.

“We are at any moment ready to cooperatively find solutions to new problems,” Schaeuble said.

“They are not advanced by speculative remarks.”

Public debate on a restructuring has been almost taboo since Athens accepted a 110 billion euro ($157 billion) bailout from the EU and International Monetary Fund nearly a year ago, and opposition to the idea remains high across the zone.

The Greek government has repeatedly ruled it out and the ECB also opposes it.

But privately, some senior euro zone government officials are acknowledging what economists have been saying for months—that some form of restructuring may have to happen, probably in 2012.

Aid under Greece’s three-year rescue package is due to flow until June 2013, but to emerge safely from its bailout, the government will have to demonstrate before then that it can tap capital markets for long-term funding.

Athens has said it would like to resume selling longer-maturity paper later this year, or in 2012 at the latest.
 

Date created : 2011-04-09

COMMENT(S)