‘Soft’ restructuring talk picks up
Kouvelis says Athens willing to discuss prospect; Juncker admits Europe would consider ‘reprofiling’
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.