Thursday

22nd Feb 2024

ECB: Non-voluntary Greek restructuring would be 'enormous mistake'

The European Central Bank chief on Thursday warned against any non-voluntary restructuring of Greek debt, rebuffing the German position in favour of such a move.

"We would say it's an enormous mistake to embark on decisions that would trigger a credit event," Jean-Claude Trichet told reporters in Frankfurt.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • The ECB opposes any non-voluntary restructuring (Photo: John D. Carnessiotis, Athens, Greece)

He said that the bank would oppose "concepts which would not be purely voluntary," wording that suggests the ECB could accept a rollover of debts agreed between the Greek state and its creditors, but not the significant losses that would be involved in what Berlin appears to be backing.

German finance minister Wolfgang Schaeuble backed a seven-year pause in the collection of debts, according to a letter leaked to the press on Tuesday.

"We are standing before the real risk of the first full-blown bankruptcy inside the eurozone," Schaeuble said in a letter addressed to European Central Bank president Jean-Claude Trichet and leaked to the German press.

He called for additional aid to be made available to Greece, adding that private banks should participate in the cost of the Greek rescue, describing as necessary "a bond swap leading to a prolongation of the outstanding Greek sovereign bonds by seven years."

Frankfurt is the holder of billions in Greek bonds while Germany is in something of a safer position.

Trichet also said that the ECB would continue to apply collateral rules in such an event, which could cut Greek banks off from needed liquidity.

Analysts however took the bank's mood as something of a retreat from its earlier more robust position against any restructuring.

"ECB president Trichet repeated the ECB's opposition against debt restructuring but in fact back-paddled a bit," said ING bank senior economist Carsten Brzeski in response to Trichet's statements.

"According to Trichet, the ECB is not in favour of debt restructuring or concepts which are not voluntary and could trigger a credit event or selective default. It looks as if the ECB's resistance to voluntary concepts is crumbling. "

EU's €723bn Covid recovery fund saw growth, but doubts remain

The €723bn Covid-19 recovery fund, launched three years ago, has been a success, according to a mid-term internal review — but less effective than initially predicted. And according to one NGO, the commission painted an "overly positive picture".

France's Le Maire 'goes German' with austerity budget

The French government announced €10bn in further spending cuts. However, defence spending is set to increase significantly, up to €413bn from €295bn, while €400m was cut from a fund meant for renovating schools, carpooling infrastructure, and other environmental projects.

Online platforms must be liable for payment scams, say MEPs

MEPs have agreed on new rules to level the playing field between banks and non-banks, and to make payments more user-friendly, cheaper and safer — including measures to make online platforms liable for payment fraud that occurs through their services.

Opinion

Blackmailing the Global South on EU carbon border tax won't work

According to the European Commission, CBAM is supposed to prevent "carbon leakage". In other words, it seeks to prevent European industries relocating to jurisdictions with less stringent environmental policies, while also incentivising carbon pricing and industrial decarbonisation abroad.

Opinion

'Crying wolf' win for chemicals lobby at Antwerp EU meeting

EU politicians will cosy up with Big Toxics at a secretive event on Tuesday to discuss a new 'European Industrial Deal' — a blatant showcase of corporate capture and an attempt to shift the political agenda in a profit-minded direction.

Latest News

  1. How Amazon lobbyists could be banned from Parliament
  2. Blackmailing the Global South on EU carbon border tax won't work
  3. EU auditors: rule-of-law budget protections only partial success
  4. EU's €723bn Covid recovery fund saw growth, but doubts remain
  5. Von der Leyen rejects extremist parties, leaves door open to ECR
  6. Russian oligarchs failed to get off EU blacklist
  7. Podcast: Navalny, Ian Bremmer and "more Europe"
  8. Only Palestinians paying thousands of dollars leave Gaza

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us