Greece Should Shun Government Debt Restructuring, Premier’s Adviser Says

Bloomberg
May 4, 2011

Greece doesn’t need to restructure its debt for now and should only consider an extension of its international loans, said Herakles Polemarchakis, an economic adviser to Greek Prime Minister George Papandreou.

“The debt has to be addressed,” Polemarchakis said in an interview at an event late yesterday at the London School of Economics. “I think that the rescheduling -- or re-profiling as it is called sometimes -- of the 100 billion euros given by the International Monetary Fund and the European Union, that’s something that could easily be done.”

Greek bond yields and the cost of insuring the country’s debt against default rose to records last week, rekindling speculation that a debt write-off or extension of repayment timelines will be the way out of the country’s fiscal quagmire. Possible options open to Greece include rescheduling the loans with the EU and IMF, lengthening the payback period of private debt, and a restructuring, Polemarchakis said.

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