Greece needs more leeway from its creditors as a pair of aid packages and the biggest-ever debt restructuring are ?clearly insufficient,? according to the financial adviser to the nation?s bond swap.
?Hyper-austerity policies are showing their limits. Greece needs more time,? Matthieu Pigasse, the head of Lazard Ltd.?s Paris office, said in an interview with France?s Le Figaro. ?There will also be a need for creditors, particularly public ones, to make a new effort,? Pigasse said.
The comments by Pigasse echo the suggestion this week by International Monetary Fund Managing Director Christine Lagarde that European policy makers consider writing off some aid to Greece, where the recession is in its fifth year. Officials in Germany and the European Central Bank have rejected such a move.
The IMF, the ECB and the European Commission are taking a weeklong break from negotiations on additional funding after Prime Minister Antonis Samaras?s three-party coalition failed to agree on 11.5 billion euros ($14.8 billion) of savings in 2013 and 2014.
Creditors have pledged 240 billion euros in aid to Greece since 2010. Greek bailout measures included private investors agreeing this year to take a 53.5 percent loss on the face value of their Greek bond holdings, reducing the nation?s debt by 100 billion euros.
Greece narrowed its deficit from more than 15 percent of gross domestic product in 2009 — five times the European Union limit — to 9.1 percent in 2011. The spending gap is due to shrink to about 7 percent of GDP this year. [Bloomberg]