Classifieds | Archives | Jobs | About TGT | Contact | Subscribe
 | 
Last updated 11 minutes ago
Printer Friendly Version | TGT@Twitter | RSS Feed |
HOME LOCAL MIDEAST ASIA WORLD BUSINESS SPORT OPINION WRITERS
Greece would have to earn haircut: ECB
November 18, 2012
 Print    Send to Friend

BERLIN: Any new haircut of Greek debt should only come as a reward for Athens implementing the reforms it has signed up to, European Central Bank Governing Council member Jens Weidmann said on Friday.

A row between eurozone governments and the International Monetary Fund over how to make Greece’s giant debt mountain manageable is holding up the release of 31 billion euros ($40 billion) in emergency loans needed to keep the country afloat.

IMF officials have argued that some writedown for eurozone governments is necessary to make Greece solvent but Germany, the biggest contributor to the bloc’s bailout funds, has repeatedly rejected the idea of taking a loss on holdings of Greek debt, saying it would be illegal.

“I regard as an open question whether the need for a haircut in debt arises,” Weidmann, who also heads the German Bundesbank, said at an event organised by the newspaper Sueddeutsche Zeitung in Berlin.

A haircut would only make sense as a reward for completing a reform package that puts the country’s finances on a sustainable basis, he said.

Once that was achieved, the country could then see its debt load cut and return to markets for funding instead of having to rely on bailout funds.

“One can pose the question whether the leap of faith that you give (with a haircut) sets the right incentives or whether it would not make sense to set a haircut, which one will need in the end to regain capital market access, as a perspective for when the reforms... have been implemented,” Weidmann said.

Reuters
 

Add this page to your favorite Social Bookmarking websites
Comments
 
Post a comment
 
Name:
Country:
City:
Email:
Comment:
 
    
    
Related Stories
G7 focuses on global growth risks, Greece
DRESDEN: Finance chiefs from the Group of Seven (G7) economic powers discussed ways to revive the faltering global recovery on Thursday as the United States leant on Euro..
Greece plays down referendum option
ATHENS: Greece’s government on Wednesday ruled out rushing to a referendum to secure public support for unpopular reforms, opting instead to make a final push for a compr..
EU economy picks up pace but Germany lags
BRUSSELS: A slowdown in Germany weighed on the eurozone in the first quarter, but the bloc’s economy still grew at its fastest in almost two years as cheap food and fuel ..
IMF says Greece made principal payment to fund
WASHINGTON: The International Monetary Fund confirmed on Tuesday that Greece had made its latest principal payment to the Fund but declined to provide details about the t..
Greek premier presses for May debt deal
ATHENS: Greek Prime Minister Alexis Tsipras said on Tuesday he was confident of an outline deal with international creditors within two weeks, after shaking up his negoti..
 
FRONTPAGE
 
GALLERY
 
PANORAMA
 
TIME OUT
 
SPORT
 
 
Advertise | Copyright