The bankers, with Jean-Claude Trichet at the frontline, reject the idea of “soft” restructuring in a form of extension of the Greek debt, even for the debt that matures by 2013.
The silent clash had broken long ago, as Kefalaio Newspaper revealed last December, when ECB warned of its intention to withdraw emergency measures and stop buying government bonds in the secondary market.
The political pressure had forced it to postpone the implementation of the decision, but it proceeded with the reducing of purchases of troubled economies’ bonds, despite widening of spreads that led Portugal to resort to EFSF and Greece in big trouble.
European Central Bank rejects debt reprofiling (through extension of repayment period), as if it is done without any “third party” guarantor, then ECB should take up the liability, while a part of the expiring debt is in its portfolio.
Moreover, an IMF report in 2003, the threat of default is not considered a sufficient condition to convince lenders to accept a “soft” restructuring through an extension of repayment period.
ECB executive member Lorenzo Bini Smaghi called “soft” restructuring as “empty slogan”, without clearing whether a third-party guarantor is required.
The bankers have called the EFSF to take up the role of indirect guarantor. European Commission sources told Capital.gr that ECB is opposed to any regulation that could lead indirectly to taking up more liabilities. The even didn’t rule out threat of completely cessation of bond purchasing and drastic reducing of government bonds from Greek banks.
This threat, according to the same sources, will not be implemented because of its disastrous consequences, but even the vocalization of the threat could cause tremors in the Eurozone.
CAPITAL
