A European Union (L) and the wave of Greek flag in front of the temble of Perthenon in Athens on April 11, 2011.
Credit: Reuters/John KolesidisBy George GeorgiopoulosATHENS | Sun on May 1, 2011, 2: 03 am EDT
Athens (Reuters) - two German Government advisors to see a restructuring of debt-for-inevitable Greece while two of the Ministers of the country overborrowed continued to rule in press interviews on Saturday.
Fears of mounting that Greece will have to restructure a mountain of debt which is expected to reach EUR 340 million this year, about one and a half times its output, have buffeted Greek bonds, driving sheets of performance on German bonds to new highs.
"For me restructuring is the only path to take, Greece to feel some relief and creditors contribute to the solution of the Greek problem," Lars Feld, one of five "wise men" who advise the German Government on economic policy, said daily to Vima in an interview.
His view echoed that of Clemens Fuest, who chairs the Technical Advisory Committee of the German Ministry of finance. He said Greek role Realnews that the country must restructure its debt no later than April 2013.
"I do not think that Greece can pay its debt without help from abroad, more than what one might expect." If there is no restructuring, uncertainty about the future of the economy of Greece will delay their growth, "said Fuest."
He said that the leaders of the European Union had begun to prepare for such an eventuality. "Not discussed a Greek debt restructuring openly because this would cause greater uncertainty and speculation on the markets", was quoted as saying.
Feld said the reason in favour of the restructuring, despite the opposition of the European Central Bank, it is because the austerity to stabilize the economy of Greece would kill its prospects of growth, with people less willing to accept belt-tightening for many yearsIf you can not see the light at the end of the tunnel.
He said that the ECB is against the restructuring because he is concerned the markets may see it spread to other euro area periphery countries worried about debt.
"The fear that the markets will say that if Greece restructured today, tomorrow will be Ireland, Portugal and Spain, etc. seriously be taken into account," Feld said the newspaper. "The question that follows is how can contain only the Greek restructuring to Greece".
The members of the Executive Board of Bank Central European Juergen Stark and Lorenzo Bini-Smaghi both warn against such action, saying that the Greek banking system of hammer and damage the credibility of Europe.
Feld said that he would like to see that the ECB changed its position, calming the markets down with an intelligent restructuring--that would block the risk of contagion in the eurozone.
"If the ECB intervenes as a programmer between its Greek and its creditors and achieves a lengthening of repayment, this would be a significant gain." Restructuring does not necessarily default, "he said."
Meanwhile, official line of Greece that the restructuring is not on the table was reiterated by two Ministers in press interviews, both saying that the Government focuses on the implementation of a three year economic plan, is in agreement with the EU and the IMF in a rescue of 110 million euros in May.
"Greece and the European Union have ruled out the possibility of a debt restructuring." This development would be negative for the area of the euro and the Greek economy, "Minister of development Michalis Chrysochoidis said newspaper of ethnic groups."
And Deputy Minister of finance Philippos Sachinidis told Eleftherotypia newspaper debt restructuring that a cut of hair that send pension funds and banks into an abyss.
(Edited by catherine evans)
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