Global Biz

Greek may restructure debt in summer

(agencies)
Updated: 2011-04-18 20:49

BERLIN - German government sources said on Monday Greece will likely restructure its sovereign debt before the end of summer, putting a time frame to recent speculation that sent the euro to its lowest in two weeks.

"Decisive voices within the federal government expect that Greece will not make it through the summer without a restructuring," one high-ranking coalition source told Reuters.

"That does not mean that the federal government is striving for (a restructuring) but such a step will probably not be avoidable," he added, echoing views from other coalition sources.

The sources did not say what sort of pressure, if any, would force Greece to change its oft-repeated stance that it would not seek to restructure its debt.

They did not specify the form a restructuring could take.

The comments sent the euro to its lowest level against the dollar since April 7, according to Reuters data.

Athens on Monday reiterated it had no plans to restructure its debt, a move its central bank chief said would be catastrophic, but markets continue to speculate that some form of restructuring is on the cards. 

The IMF, European Central Bank and European Commission will examine in June whether Greece has met the prerequisites to receive the next tranche of its 110 billion euro bailout package.

In an interview in Die Welt published last week, German Finance Minister Wolfgang Schaeuble said "additional steps" would need to be taken should the progress report in June conclude there are doubts about the fiscal sustainability.

Schaeuble added then, however, that any restructuring would have to be voluntary if done before 2013.