Financial Times
July 13, 2011
The International Monetary Fund on Wednesday warned that the Greek sovereign debt burden risked spiralling out of control and that it would be “appropriate” for private bondholders to share in any restructuring.
The IMF’s intervention, in a staff report published on Wednesday, comes as eurozone finance ministers have moved towards forcing private investors to accept a reduction in the value of their assets, a move regarded with great suspicion by the European Central Bank.
“It will be important for euro area member states to decide how they fundamentally wish to support Greece,” IMF staff said, in a report which inspired last week’s decision by the fund’s executive board to release its latest tranche of rescue lending. “In this context, comprehensive private sector involvement is appropriate, given the scale of financing needs and the desirability of burden sharing”.
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