Reuters
May 26, 2011
Greece needs creditors to take a haircut of 40 percent and swap the remainder of its debt for some form of jointly-issued euro zone bonds as part of an overall package encompassing other struggling states, a German government advisor said.
"One needs a comprehensive concept that decides just how much debt states like Greece, Ireland, Portugal, Spain and Italy can sustainably bear," said Peter Bofinger, an economist who sits on a five-person advisory panel known as the "wisemen".
"That requires an enormous effort, but it is necessary," he added, speaking to journalists in Hamburg on Wednesday evening.
Bofinger, generally considered to be a Keynesian, has supported a type of economic rebuilding programme akin to the Marshall Plan instituted in Germany after the second world war.
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