ECB continues to oppose any restructuring
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.”