Plan for market return remains

Greek Finance Minister Giorgos Papaconstantinou said on Wednesday that the country still plans to return to bond markets this year but could use a newly expanded European assistance program in 2012 if it fails to do so.

European Union leaders on the weekend agreed to improve the terms of Greece?s bailout loans, totaling 110 billion euros through 2013, and allow a new financial rescue fund to buy bonds directly from struggling eurozone countries in exceptional circumstances.

Papaconstantinou told Parliament that Greece needs to borrow 66 billion euros in 2012 and would need to raise 27 billion euros through bond sales, on the market or with EU help.

Bailed-out countries will be able to tap the 440-billion-euro European Financial Stability Facility (EFSF) if they are unable to access bond markets in a decision Papaconstantinou has described as being able to help countries like Greece address future debt problems.

The head of the eurozone EFSF safety net said in Germany on Wednesday that it was not yet possible to say whether Greece will have to restructure its debt.

Sources from Germany?s ruling coalition said after a parliament committee hearing with EFSF head Klaus Regling that he told them the question of whether Greece would have to restructure cannot yet be answered.

Meanwhile, Peter Praet, a candidate for the European Central Bank?s Executive Board, said that Greece should be given time to sort out its finances before talk of any debt restructuring, which would have serious consequences.

?We have to think very carefully about the implications if you let a sovereign default of a country in the European Union,? Praet told the European Parliament?s economic affairs committee on Wednesday.

?Some say the negative externalities would be limited. Some have a different judgment, and that is my point of view,? Praet told a hearing on his candidature for the ECB post.

?You have to give a chance to this program [of debt reduction] in Greece. It?s very tough but the country is very committed.?

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