Premier: No move to restructure Greek debt

 Greece isn’t moving to restructure its sovereign debt, Prime Minister George Papandreou told the World Economic Forum’s annual meeting on Thursday.

“We are not moving to restructuring ... We have a road map to move out of the debt problem,” Papandreou said in a panel discussion at the World Economic Forum’s annual meeting, where he was joined by European Central Bank President Jean-Claude Trichet and
British Deputy Prime Minister Nick Clegg.

Small explosion at Davos hotel

A small explosion rocked a hotel about three quarters of a mile from the venue where the World Ecomomic Forum was being held shortly after 9am Zurich time. The exact cause of the blast is under investigation.

Greece has seen rounds of sometimes-violent protests and strikes since the government began moving to implement far-reaching austerity measures aimed to bring down a massive deficit. Greece’s debt woes sent its borrowing costs soaring, shutting it out of credit markets last spring and forcing it to take a €110 billion bailout package from the European Union and International Monetary Fund.
Last November, Ireland became the second euro-zone nation to seek a bailout, tapping the newly-established European Financial Stability Facility established by the EU and IMF.
Greek government bond yields and credit default swap spreads, a measure of the cost of insuring debt against default, remain extremely elevated. Many economists have argued that even with austerity measures, Greece’s debt load will prove unsustainable, ultimately requiring restructuring.
Papandreou said discussions to lengthen the repayment of the rescue package were in the pipeline, but said the government has already proved it’s capable of delivering on its austerity goals after slicing the deficit by six percentage points of GDP last year.
Papandreou didn’t directly address proposals that would reportedly allow Greece to buy back some of its debt in purchases funded through the EFSF.
The premier, however, said a “stronger” and “more flexible” EFSF would help. The fund could be a “major tool to calm the markets and deal with the debt problem,” he said.
Trichet, who appeared in a pair of panels on Thursday, reiterated his call for a “quantum leap" in euro-zone governance, or strengthening fiscal rules and their enforcement.
Trichet was scheduled to hold a bilateral discussion with U.S. Treasury Secretary Timothy Geithner in Davos. Geithner was also scheduled to meet with British Chancellor of the Exchequer George Osborne and other officials.

by William L. Watts 

source: MarketWatch