ECONOMY

Talk of restructuring lingers

The European Union?s executive arm is not aware of any talks concerning Greek debt restructuring, European Commission spokesman Amadeu Altafaj said on Wednesday.

The Financial Times Deutschland reported yesterday that some eurozone governments are concerned that Greece will not be able to refinance itself and may have to restructure its debt.

“We are not aware of any such discussions,» Altafaj told reporters.

“The Commission has asked the Greek government to respect its obligations in terms of debt servicing, and the system should now allow the Greek economy to sort out its budget position, to reform its economy to make it more competitive, to restore market confidence to allow it come back to the market as quickly as possible with a reasonable rate of interest,» he said.

“We… exclude the scenario that you allude to, because in agreement with all eurozone members and the IMF and the ECB we have set up an action plan for dealing with [Greece],» Altafaj said.

“Quarter after quarter the Greek authorities have been evaluated in how they are implementing the program and each evaluation has been positive,» he said. «It is normal that there are some difficulties, but Greece is on the right track.”

In a story published Wednesday, the financial daily reported that representatives of several eurozone governments told the paper that a restructuring could no longer be ruled out, without naming its sources or the countries involved.

“An extension and top-up of the aid package would not be politically possible. Then, consequences would have to be drawn,? the paper quoted a source in the finance ministry of a large eurozone country as saying.

It also quoted an adviser to the leader of an EU state as saying, ?We must have a Plan B ready? for the possibility Greece requires more financial assistance.

Greek and European officials have long insisted that Greece can recover without restructuring and that even discussing a restructuring now would be counterproductive as it would damage banks across Europe and cause panic in markets.

Greek government spokesman Giorgos Petalotis repeated on Wednesday that Athens was not looking into restructuring its massive debt pile.

?Some people think that a restructuring means that creditors just give away debts… but a restructuring would hurt all of us,? he told Skai Radio.

On Saturday, the International Monetary Fund denied a report in German news magazine Der Spiegel that it was privately pressing Greece to restructure its debt.