Battery against debt restructuring

Battery against debt restructuring

A categorical "no" to the possibility of restructuring the Greek national debt was given by the Finance Minister...

A categorical "no" to the possibility of restructuring the Greek national debt, was given by the Finance Minister, Mr. George Papakonstantinou, and the Governor of the Bank of Greece, George Provopoulos in respective interviews for Sunday newspapers.

Specifically, the "Eleftherotypia on Sunday" newspaper included a statement by Mr. Papaconstantinou, in which he expresses his confidence that Greece "can and should avoid" debt restructuring.

According to the Minister of Finance, the Greek economy will create, and maintain for many years, a primary surplus of around 5% -6%, achieving major restructuring cuts and structural changes that will raise the number of real economic growth above 2%.

He stressed that the extension for the repayment of the 100-billion Troika loan, which he hoped would introduce "more favorable financing terms under new European decisions", will contribute to the above.

On Diaspora bond markets

Mr. Papaconstantinou reiterated that Greece will return to the markets within the year, with the "Diaspora bond" as its main effort, which will be issued within the next few months and will be addressed to Greeks living outside Greece at less than the current market rate.
On his part, the governor of the Bank of Greece, George Provopoulos, stressed that even the mere discussion of restructuring the Greek debt harms the country.

"The restructuring will trigger an uncontrollable chain reaction that would open a new, long cycle of distrust in the future of the Greek economy", estimated Mr. Provopoulos, who emphasised that the economic and political costs would be much greater than the "short-term costs of fiscal adjustment that we must work with today. "

The extension is not a panacea

The Governor of the Bank of Greece states that "the extension of the debt repayment would be a positive development, but no panacea" and added that there should be a parallel action plan for development.

He added that the objectives of the memorandum defines the minimum required actions to address the crisis and must be applied consistently, as well as the fact that "an equally binding, coherent action plan for development, key aspects of which are presented in detail in the latest Monetary Policy Report", is also required.

Finally, Mr. Provopoulos was still in favor of bank mergers, saying that " after the crisis, Greek banks will face serious challenges."
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