Reuters/Yahoo News
April 15, 2011
Greek borrowing costs soared to new highs on Thursday and pressure rose on other financially weak euro zone countries after Germany suggested for the first time that Athens may have to restructure its large debt load.
European policymakers scrambled to reassure investors that a restructuring for Greece was not on the agenda, saying such a step could have dire consequences for European banks and the fragile economy of the 17-nation euro zone.
The Greek government also ruled out a restructuring, vowing to deliver on the ambitious fiscal goals set out for it by the EU and International Monetary Fund last year in exchange for a 110 billion euro ($160 billion) rescue.
Efforts to quell fears came after German Finance Minister Wolfgang Schaeuble became the first senior euro zone official to acknowledge publicly that restructuring may be a possibility.
French Finance Minister Christine Lagarde said no talks about restructuring Greece's debt were under way and that Athens was working hard to get its fiscal house in order.
"There is no discussion of debt restructuring as far as Greece is concerned. None whatsoever," Lagarde told reporters in Washington ahead of a meeting of Group of 20 advanced and developing economies.
But doubts have grown in recent weeks about whether Greece can achieve those targets and restore confidence in time to return to capital markets for funding next year.
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