Tuesday, May 17, 2011

EU looks at Greek debt options

Financial Times
May 17, 2011

European leaders have admitted that a rescheduling of Greece’s debt payments is possible but insisted they would do so only if Athens first demonstrated progress in implementing painful financial reforms.

The most likely form of adjustment would be an extension of maturities on Greece’s debts – something that Jean-Claude Juncker, Luxembourg’s prime minister and president of the eurozone finance ministers, referred to as a “soft restructuring”.

“If Greece makes all these unpleasant efforts ... then we’ll have to see whether we can’t proceed to a soft restructuring of Greek debt,” Mr Juncker said. “I am opposed to a large restructuring.”

“A voluntary extension of loan maturities, a so-called reprofiling or rescheduling on a voluntary basis, could also be examined,” Olli Rehn, Europe’s economics commissioner, added after the conclusion of a two-day meeting of European finance ministers in Brussels.

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