Fin mins, ECB disagree on Greek restructuring-report

BERLIN, April 9 (Reuters) – Several euro zone finance
ministers told ECB President Jean-Claude Trichet in a conference
call last week they have doubts Greece will meet its fiscal
targets and suggested Athens restructure its debt, a magazine
reported on Saturday.

According to Der Spiegel magazine, several of the finance
ministers said Athens would be unable to meet its fiscal targets
and return to the markets for funding next year and asked if a
debt restructuring for Greece would be sensible in view of the
situation. But European Central Bank chief Trichet blocked the
idea and said he was not willing to discuss it, Der Spiegel
said.

The report, to appear on Monday, said Trichet feared that a
restructuring could damage confidence in the entire euro zone
and could hit banks holding Greek debt hard.

German Finance Minister Wolfgang Schaeuble viewed Trichet’s
concerns about capital markets to be exaggerated and not
credible, Der Spiegel said.

Participating in the conference call with Trichet were key
euro zone finance ministers as well as European Union Economic
and Monetary Affairs Commissioner Oliver Rehn.

Der Spiegel said Rehn had told the EU Commission last week
that any idea of a Greek restructuring, if it were to be
required, should not be discussed in public but would simply
happen at some point.

Public debate on a restructuring has been almost taboo since
Athens accepted a 110 billion euro ($157 billion) bailout from
the EU and International Monetary Fund nearly a year ago, and
opposition to the idea remains high across the zone.

The Greek government has repeatedly ruled it out and the ECB
also opposes it.

But privately, some senior euro zone government officials
are acknowledging for the first time what private economists
have been saying for months — that some form of restructuring
may have to happen sooner, probably in 2012.

Aid under Greece’s three-year rescue package is due to flow
until June 2013, but to emerge safely from its bailout, the
government will have to demonstrate before then that it can tap
the capital markets for long-term funding.

Athens has said it would like to resume selling
longer-maturity paper later this year, or in 2012 at the latest.

Euro zone officials have shied away from discussing a Greek
restructuring publicly for fear of panicking the markets. But it
is now a year-and-a-half since the Greek debt crisis erupted,
giving banks plenty of time to prepare for such an eventuality.
(Writing by Erik Kirschbaum; editing by Susan Fenton)

Fin mins, ECB disagree on Greek restructuring-report