Greek government debt bought by the European Central Bank to help Greece during the sovereign debt crisis cannot be restructured, ECB Executive Board member Benoit Coeure said in an interview with France 24 TV station.
Greece will hold a parliamentary election on Jan. 25, with a lead in the polls for Syriza, a leftist party that opposes the country’s international bailout programme and vows to tear up a deal with the European Union and the International Monetary Fund.
Coeure told France 24 that Greek bonds bought by the ECB since 2010 to help Athens could not be restructured.
“It is illegal and contrary to the treaty to reschedule a debt of a state held by a central bank. The European treaties are very clear on this,” Coeure told the station.
Asked if the Greek election and the potential for a Syriza victory, which has shaken financial markets, meant the ECB had further reason to act and launch a state bond buying programme, Coeure replied:
“No, there’s no connection. The monetary policy decisions of the ECB are for the whole of the euro zone and Greece is a very small part of the euro. So they are two different discussions,” Coeure said.
There is another solution, but of course, it will bring forth the same consequences as does the inevitable debt restructuring. Solution is that The ECB buys on its balance sheet (all the) debt held by official sector (other Euro zone countries), set the maturity to 20,000 years with an interest rate of 0,00 per cent.
The consequences are that everyone else wants to have the same treatment for themselves.
Additionally, this will not solve future imbalances that unworkable monetary union will cause.
I wonder what a restructure or get nothing option would be considering that these ”loans” were set up after denying the Greek people a referendum and effectively dumping PASOK who proposed this –