US economist Jeffrey Sachs has called for the European Union and the International Monetary Fund to help Greece in its negotiations with private bondholders and suggested that the interest rate on any new bonds offered to investors should not be more than 4 percent.
Speaking to Skai TV?s Thanos Dimadis in New York, Columbia University professor Sachs said that the European Central Bank, the European Commission and the IMF ? which form the troika that is managing the Greek bailout ? should stand by Greece as it negotiates the private sector involvement (PSI).
?To leave Greece to negotiate with private creditors is not the official support that they need to show Greece at the moment,? he said.
Sachs suggested that a reported interest rate of 5 percent for new Greek bonds would not make the country?s debt sustainable and that a rate of close to 3 percent should be agreed instead. ?It should be no bigger than 4 percent,? he said.
The economist also called for the debt held by the ECB, IMF and eurozone countries ? which will not be included in the haircut talks ? should also be restructured.
Sachs, who advised George Papandreou when he was prime minister, added that although Greece had created a lot of its own problems, it was paying the price of Germany?s policies in confronting the eurozone crisis.