Greek Finance Minister George Papakonstantinou told German daily Handelsblatt that debt restructuring for Greece isn΄t desirable, while it could spark contagion effects, according to Dow Jones Newswires.
"Related private investors΄ losses could lead to stability problems in the Greek and European banking system," Papakonstantinou said, adding that the resulting loss of confidence would close Greece out of the markets for a long time.
"Related private investors΄ losses could lead to stability problems in the Greek and European banking system," Papakonstantinou said, adding that the resulting loss of confidence would close Greece out of the markets for a long time.
"In the end, the costs would hit the real economy," Papakonstantinou said.
Possible problems resulting from the restructuring could spread to other countries, he added.
"All this makes debt restructuring for Greece undesirable," Greek Finance Minister stated.
"We know, however, that we must raise €25b to €30b in 2012 with bond issuance," he said. Greece is aware of the fact that the risk premia are still very high, he added.
When asked about the impact of the European Central Bank΄s 25 basis point interest rate rise last Thursday, Papakonstantinou said he understands the ECB΄s priorities and would not publicly discuss the ECB΄s rates policy, according to Dow Jones Newswires.
"It΄s clear that from a fiscal aspect, higher rates are problematic for us," Papakonstantinou concluded.
source: CAPITAL
