Talk of soft restructuring picks up

Top Greek and EU officials both admitted on Tuesday that Athens could go ahead with a soft restructuring of its debt after months of denials that the option is even being considered.

Deputy Foreign Minister Spyros Kouvelis said on Tuesday that Greece is willing to discuss the prospect of a ‘soft restructuring’ of its debt if needed, but stressed that talks are not happening right now.

“If it’s necessary, we will of course be willing to discuss such things,» Spyros Kouvelis said, when asked about the chance of a «soft restructuring» of Greece’s debt.

“These will be scenarios that we have to look at if need be,» Kouvelis said in an interview to Reuters in Beijing. «But I think this is a broader question for the whole euro zone that will have to be tackled by the euro group.”

Kouvelis’ comments came after euro zone officials said for the first time on Tuesday that Greece may have to ask investors to extend the maturities of the Greek debt that they hold, or agree to a ‘soft’ restructuring, to give Athens more time to nurse its economy back into health.

Jean-Claude Juncker, the chairman of euro zone finance ministers, said that Europe would consider ?reprofiling? Greek bond maturities as part of a package including stepped-up sales of state assets and deeper spending cuts

?We?ll have to see whether we can?t proceed to a soft restructuring of Greek debt,? he said in Brussels. ?I am strictly opposed to a large restructuring of Greek debt.?

Introducing that prospect marks a break in Europe?s crisis- fighting strategy, with governments potentially shifting some costs to bondholders instead of relying on taxpayer-funded bailouts to stamp out the debt crisis.

The talks were clouded by the absence of International Monetary Fund Managing Director Dominique Strauss-Kahn, who was denied bail in New York on Monday after being arrested on sexual-assault charges.

The terms ?soft restructuring? and ?reprofiling? have the same meaning, said Juncker?s spokesman, Guy Schuller.

Both terms refer to an extension of debt maturities, Schuller said.

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