ECB con­tin­ues to op­pose any re­struc­tur­ing

Kathimerini English - - Business & Finance -

The Euro­pean Cen­tral Bank will not soften its strong op­po­si­tion to a Greek debt re­struc­tur­ing, out­go­ing Ex­ec­u­tive Board mem­ber Gertrude Tumpel-Gugerell said yes­ter­day.

Tumpel-Gugerell told Reuters that giv­ing Greece more time to pay back its debts would amount to a de­fault no mat­ter how it was pre­sented.

Asked whether a full re­struc­tur­ing of Greek debt or the milder re- pro­fil­ing that has been touted re­cently was an op­tion the ECB could live with, she strongly re­buffed the idea, say­ing, “It is not an op­tion.”

Asked whether the ECB might soften its stance once the Euro­pean Com­mis­sion, In­ter­na­tional Mon­e­tary Fund and ECB had sat down with the Greek gov­ern­ment af­ter the lat­est as­sess­ment of Athens’s progress, she was equally clear: “It is not the case.”

She de­clined to com­ment on whether a debt rollover – pri­vate in­vestors vol­un­tar­ily agree­ing to buy more Greek debt once cur­rent bonds ex­pire – might sat­isfy the ECB.

A num­ber of top ECB pol­i­cy­mak­ers have been de­lib­er­ately blunt in their warn­ings of the con­se­quences of a Greek debt re­struc­tur­ing in re­cent weeks.

Juer­gen Stark and Jose Manuel Gon­za­lez-Paramo have both said it could be more dam­ag­ing than the col­lapse of Lehman Brothers, while Lorenzo Bini Smaghi has warned it would be a death sen­tence for the Greek bank­ing sys­tem.

Mario Draghi, who is widely ex­pected to be the next pres­i­dent of the Euro­pean Cen­tral Bank, said yes­ter­day that eu­ro­zone gov­ern­ments that sup­port part­ners in the cur­rency area are do­ing so with “strin­gent con­di­tions.”

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