Brussels, 14/04/2011 (Agence Europe) - The German finance minister, Wolfgang Schäuble, has said that new measures may be necessary to help Greece tackle the heavy burden of public debt, which will be 150% above its Gross Domestic Product in 2011. On 14 April, he informed Die Welt newspaper that “in June a progress report is due. I expect a detailed analysis of Greece's debt sustainability, which will be carried out in consultation with the Commission and the ECB…If this report should conclude that there is doubt about the debt sustainability, something would have to be done. Further measures would have to be taken”. These measures may include losses for private lenders within the European stability mechanism, which will be introduced in the middle of 2013 (EUROPE 10345). The minister added that “until then, any restructuring could only happen on a voluntary basis”. The eurozone summit has decided to authorise the current EFSF facility (used to support Ireland - and Portugal in the future) to purchase sovereign debt bonds directly from the issuer countries. This competency will be in force as from the summer.
During last weekend's meeting of finance ministers near Budapest, Commissioner for Economic and Monetary Affairs Olli Rehn and President of the ECB Jean-Claude Trichet categorically ruled out any possibility of restructuring Greece's debt. They explained that Greece is applying an economic adjustment programme in exchange for international financial aid so that Greece can borrow on the financial markets as from 2012 (EUROPE 10355). The German weekly, Der Spiegel, however, asserted that several finance ministers had discussed the possibility of restructuring at the beginning of April.
According to the Financial Times, the Greek finance minister, George Papaconstantinou, has also recognised that his country needs more time to convince investors of its ability to refinance itself on the markets. In his opinion a decision should to be taken this summer once Portugal has concluded its negotiations on international aid. At the end of the week, Athens will put forward a revised austerity programme aimed at making additional savings and increasing tax revenue to a total amount of €23 billion. (M.B./transl.fl)