The washington postThat is a fierce rebuttal of comments by other top EU officials, who said they would not exclude a voluntary stretch-out of bond repaymentsCutting off Greek banks from ECB credits would probably lead to bank failures, analysts say, as many of them depend on the central bank’s emergency aid for day-to-day survivalSovereign debt restructuring would undermine the eligibility of Greek government bonds ... A continuation of liquidity provision would be impossible,” Stark said Wednesday during a visit to Greece, an ECB spokesperson confirmed Thursday. The person demanded anonymity in line with bank practiceThe split over whether to consider restructuring debt comes as European officials wrestle over whether to give Greece another bailout to keep it from a disastrous default that would shake Europe’s currency union.
Greece got a €110 billion ($157 billion) bailout from the other eurozone countries and the International Monetary Fund last year after its financial troubles made it impossible for it to borrow money at affordable rates on the bond market.Bini Smaghi, a fellow member of the ECB executive board, have this week rejected any talk of restructuring.
Greece’s economy has continued to sink under the burden of spending and tax cuts aimed at making the country creditworthy again, and the initial goal of returning to bond markets next year has faded. Ireland and Portugal have also taken EU-IMF bailout packages to avoid defaultingSo far, the crisis is confined to the three small countries but the longer term fear is that their troubles might spread to larger euro members such as Spain who would be too large to bail outJean-Claude Juncker, the head of the eurozone finance ministers’ group, said Tuesday that he would “not exclude” a “reprofiling” of Greece’s debt if it takes still more steps such as selling government property but still needs help beyond that.
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