‘Soft’ re­struc­tur­ing talk picks up

Kou­velis says Athens will­ing to dis­cuss prospect; Juncker ad­mits Europe would con­sider ‘re­pro­fil­ing’

Kathimerini English - - Business & Finance -

Top Greek and EU of­fi­cials both ad­mit­ted yes­ter­day that Athens could go ahead with a “soft” re­struc­tur­ing of its debt af­ter months of de­nials that the op­tion is even be­ing con­sid­ered.

Deputy For­eign Min­is­ter Spy­ros Kou­velis said yes­ter­day that Greece is will­ing to dis­cuss the prospect of a soft re­struc­tur­ing of its debt if needed, but stressed that talks are not hap­pen­ing right now.

“If it’s nec­es­sary, we will of course be will­ing to dis­cuss such things,” Spy­ros Kou­velis said, when asked about the chance of a soft re­struc­tur­ing of Greece’s debt.

“These will be sce­nar­ios that we have to look at if need be,” Kou­velis said in an in­ter­view to Reuters in Bei­jing. “But I think this is a broader ques­tion for the whole eu­ro­zone that will have to be tack­led by the euro group.”

Kou­velis’s com­ments came af­ter eu­ro­zone of­fi­cials said for the first time yes­ter­day that Greece may have to ask in­vestors to ex­tend the ma­tu­ri­ties of the Greek debt that they hold, or agree to a ‘soft’ re­struc- tur­ing, to give Athens more time to nurse its econ­omy back to health.

Jean-Claude Juncker, the chair­man of eu­ro­zone fi­nance min­is­ters, said that Europe would con­sider “re­pro­fil­ing” Greek bond ma­tu­ri­ties as part of a pack­age in­clud­ing steppedup sales of state as­sets and deeper spend­ing cuts

“We’ll have to see whether we can’t pro­ceed to a soft re­struc­tur­ing of Greek debt,” he said in Brus­sels. “I am strictly op­posed to a large re­struc­tur­ing of Greek debt.”

In­tro­duc­ing that prospect marks a break in Europe’s cri­sis-fight­ing strat­egy, with gov­ern­ments po­ten­tially shift­ing some costs to bond­hold­ers in­stead of re­ly­ing on tax­payer-funded bailouts to stamp out the debt cri­sis.

The talks were clouded by the ab­sence of In­ter­na­tional Mon­e­tary Fund Man­ag­ing Di­rec­tor Do­minique Strauss-Kahn, who was de­nied bail in New York on Mon­day af­ter be­ing ar­rested on sex­ual-as­sault charges.

The terms “soft re­struc­tur­ing” and “re­pro­fil­ing” have the same mean­ing, said Juncker’s spokes- man, Guy Schuller, as both terms re­fer to an ex­ten­sion of debt ma­tu­ri­ties.

Mean­while, Pa­cific In­vest­ment Man­age­ment Co’s Mo­hamed El-Erian said yes­ter­day that the prob­a­bil­ity of Greece de­fault­ing or re­struc­tur­ing its debt has in­creased since the ar­rest of In­ter­na­tional Mon­e­tary Fund head Strauss-Kahn.

“Don’t un­der­es­ti­mate how im­por­tant Do­minique Strauss-Kahn was in co­or­di­nat­ing ac­tion” among Euro­pean na­tions, El-Erian told Bloomberg.

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