Soros calls for 50 pct debt haircut

Influential US investor George Soros has told Kathimerini that the Greek debt ought to be restructured by 50 percent, provided that Greece remains in the eurozone and that the restructuring is voluntary.

In an interview with Sunday?s Kathimerini, Soros warned that ?if there is a Greek default it could bring down the credit system and create a global recession.?

?Greece is in a terrible state and is facing a possible bankruptcy,? he added.

?The Greek debt has to be restructured as it is too large. If possible, that should be voluntary so as not to cause a credit event. It could be done through the issue of new bonds guaranteed by the European Financial Stability Facility (EFSF). Greece should remain a member of the eurozone, but needs to take measures,? Soros said.

In order for banks not to crumble, the local credit system must be recapitalized with the contribution of the EFSF and secure guarantees for bank deposits. Soros suggested that the best time for a debt restructuring would be after the disbursement of the sixth tranche of the Greek bailout, expected next month.

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