January 27, 2012
A senior European policy maker said euro-zone governments may have to increase their contributions to Greece's debt deal, and said he was hopeful agreements could be struck soon to increase euro-zone bailout funds and International Monetary Fund resources.
European Union economics commissioner Olli Rehn also appealed to the U.S. and other countries not to block an expansion in IMF resources—even if they didn't want to contribute directly.
"It's in the interests of all concerned that we conclude a voluntary deal [for Greece] in the coming days, preferably in January rather than February," he said in an interview.
Mr. Rehn said euro-zone governments may need to increase their financial contributions to Greece beyond the levels agreed to in October. This could require more lending by euro-zone governments and some concessions on interest rates on existing official loans—but no cuts in official debts.
Mr. Rehn said once a deal was reached with private bondholders in Greece's debt-restructuring talks, a new analysis would follow to see if Greece's debt is sustainable—after which the contribution of euro-zone member states might have to be adjusted. "I don't rule out a small adjustment of lending needs of the euro-area member states," he said.
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