The euro zone must avoid triggering a so-called credit event as it hammers out a new deal on Greek debt, Olli Rehn, the European commissioner for economic and monetary affairs, said on Wednesday.
"We have been discussing a Vienna style initiative and in that context we have also examined the feasibility of a voluntary debt rescheduling or reprofiling on the condition that it will not create a credit event," Rehn said told reporters on the sidelines of Financial Times Deutschland Banking Day.
Rehn also confirmed that the euro zone held a teleconference on the Greek situation on Wednesday evening. When asked about the discussion, he said it centered on Greece.
"It was underlined that it is essential that Greece meets its fiscal targets for this year with concrete measures that have been agreed ... Greece is now committed to meeting targets. It has specified concrete measures," he said, and added extending debt maturities was part of the discussion.
Rehn also said that while Germany is enjoying a strong economic recovery, other parts of the euro zone are seeing only moderate improvements.
"Germany is seeing a robust recovery but there are other areas in Europe where we are still talking about modest recovery," Rehn said.
The warning follows a broader decline of economic sentiment in the euro zone in recent weeks, which has suggested the bloc's recovery has lost some momentum after a strong first quarter.
Rehn also said he was concerned about the current debt strains in the U.S. which are very serious and have an impact on Europe and the rest of the world.
"The situation concerning the U.S. fiscal deficit and debt is a very serious one and the Republicans and the Democrats do seem to make much progress on an agreement (on the deficit)," Rehn said.
"Some small steps have been taken but nothing fundamental ... I hope it finds a deal sooner than later because it has a real monetary impact on the whole world economy and certainly Europe."
"But at this stage it is difficult to be excessively optimistic over such a deal in the short term," Rehn added.
Reuters
