EU denies possibility of Greek debt restructuring

20:33, April 28, 2010      

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The European Union (EU) said on Wednesday that there is no possibility for Greece to delay its repayment of government bonds for debt restructuring.

"Debt restructuring for Greece, or for any euro area member state is not an option," Amadeu Altafaj, spokesman for EU Economy Commissioner Olli Rehn, told reporters at daily press conference.

Athens is facing a looming deadline to pay back 8.5 billion euros (11.3 billion U.S. dollars) by May 19, with the situation getting urgent day by day.

Altafaj tried to assure markets that Greece would get a joint aid by eurozone countries and the International Monetary Fund (IMF) in time. He said the current talks on the bailout plan among the EU, the IMF and the Greek government are "accelerating."

"There is no doubt Greece's needs will be met in time," he said.

Eurozone finance ministers hammered out a detailed aid package for Greece on April 11. According to the aid package, member states of the euro zone will grant Greece through the European Central Bank (ECB) up to 30 billion euros (40 billion U.S. dollars) with an interest rate around five percent for three years, while IMF was expected to release further 10 to 15 billion euros (10.3 to 19.9 billion dollars) with a lower interest rate.

Faced with unprecedented borrowing costs, Greek Prime Minister George Papandreou formally asked for activation of the joint aid program on Friday, but the request has to be assessed by the European Commission and the ECB. Eurozone governments also have to approve their individual contribution.

European financial markets plunged for the second day on Wednesday after the Standard and Poor's ratings agency downgraded Greek debt to "junk" status on Tuesday.



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