UPDATE 1-France’s Lagarde sees no debt restructurings -paper

* Sees no Greek or other sovereign debt restructuring

* Says EU rescues were needed but ‘violated’ rules – WSJ

PARIS/BRUSSELS, Dec 17 (BestGrowthStock) – Debt restructuring is not
on the agenda in the euro zone, and policymakers deliberately
chose to break rules and close ranks in bailing out Greece and
Ireland, French Economy Minister Christine Lagarde was quoted as
saying.

In an interview with Belgian newspaper De Tijd on Saturday,
Lagarde denied restructuring was on the cards as far as Greek or
other sovereign debt was concerned.

Concerns about the ability of countries on the euro zone
periphery to manage their debt were ratcheted up a notch on
Friday as credit agency Moody’s slashed its rating on Ireland
and EU leaders meeting in Brussels steered clear of immediate
new measures to tackle the fiscal crisis.[ID:nLDE6BE29I]

“European leaders failed to address the issue of debt
sustainability and possible insolvency problems prior to 2013,”
Carsten Brzeski, senior economist at ING Belgium, said on
Friday.

“Debt restructuring, a common euro zone bond or an increase
of the EFSF (rescue fund)? None of these issues have been
addressed. But they have to be.”

In separate comments reported by the Wall Street Journal,
Lagarde said euro zone policymakers deliberately chose to
“violate” the bloc’s rules in rescuing Greece and Ireland,
closing ranks to protect the single currency area’s future.

The EU’s governing Lisbon Treaty places constraints on
bailouts. European leaders agreed at the summit on Thursday to
amend it by creating a permanent financial safety net from 2013.

Lagarde said the amendment amounted to a “major adjustment”,
but that a change was necessary after the tumult of this year’s
debt crisis.

The Greek and Irish bailouts and the creation of a temporary
European rescue fund had been “major transgressions” of the
treaty.

“We violated all the rules because we wanted to close ranks
and really rescue the euro zone,” Lagarde was quoted as saying.

“The Treaty of Lisbon was very straight-forward. No
bailout.”

The summit approved a two-sentence amendment to the treaty
at Germany’s behest to permit the creation of a European
Stability Mechanism to handle financial crises from 2013.
[ID:nLDE6BF24I]

The ESM, to replace a temporary European Financial Stability
Facility created in May, will be empowered to grant loans on
strict conditions to member states in distress, with private
sector bondholders sharing the cost of any sovereign debt
writedown on a case-by-case basis.

The aim is for all 27 member states to ratify the change by
end-2012.

(Reporting by Leigh Thomas and Foo Yun Chee; Editing by John
Stonestreet)

UPDATE 1-France’s Lagarde sees no debt restructurings -paper