Debt restructuring is not an alternative to fundamental structural reforms for countries facing financial difficulties such as Greece, European Union President Jose Manuel Barroso said Tuesday.
"Debt restructuring is not an alternative to the painful fiscal exercises member states have to do," Barroso said in response to questions from members of the European Parliament in Strasbourg. "The reality is that some painful measures are unavoidable in Greece...my appeal to Greek leaders [is] to explain, in honest terms, to the people of Greece what they have to do."
He also said that the creation of the European Stability Mechanism should be the focus of Europe's efforts, rather than the creation of a common euro-zone debt instrument or so-called euro bond.
"We are trying to increase flexibility for intervention in markets, but now we should focus on ESM and only discuss [a] future of euro bonds if member states are willing to take that step," he said, adding that "the reality is, there was no agreement between member states."
He added that single currency members are committed to provide all the guarantees the European Central Bank needs to fulfil its role, and that the commission, the EU's executive arm, will soon issue proposals for a financial transaction tax.
"I am in favour of a financial transaction tax and will come forward with some ideas in very near future," Barroso said.
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