A restructuring of Greece’s €340-billion ($481.5-billion) debt is not on the agenda and would damage the country’s credibility on bond markets, the European Union’s internal markets commissioner said on Saturday.
Forcing Greece’s private creditors to take part in an upcoming aid package would count as a restructuring and is not being considered either, Michel Barnier told Europe 1 radio.
“This question of a restructuring … is not on the table,” he said. “It would only postpone the problem and in the wake of a restructuring Greece would face exactly the same difficulties and would no longer have any credibility to borrow.”
Greece’s embattled prime minister on Friday sacrificed his finance minister to force through an unpopular austerity plan and avert bankruptcy, while EU powers Germany and France promised to go on funding Athens.
Citing German and French backing for a plan to involve private bondholders such as banks on a purely voluntary basis, Barnier said: “To impose an effort would be to acknowledge a restructuring and that is not on the agenda.”
Describing Greece as a country that had been badly run and had lived above its means, Barnier said the solution was a “collective” effort to successfully thrash out the details of a new rescue plan in the coming weeks.
“We don’t have the right to draw blank cheques on the back of future generations,” he said. “The work is to continue over the coming weeks.”
Bond markets remain spooked by fears of a Greek default and most economists are overwhelmingly sceptical that Greece can ever repay its debts in full. – Reuters