Eurozone divided over Greece debt solutions

BRUSSELS – Top European officials disagreed over whether to consider changing the debt repayment terms for Greek bonds, a move some experts say is inevitable and others deem too risky for the region’s broader financial stability.

Jean-Claude Juncker, chairman of the group of 17 eurozone finance ministers, said Monday he “wouldn’t exclude” a voluntary delay to repayments on Greek government debt that would give the struggling country more time to fix its economy and regain market trust.

But he was immediately contradicted by France’s Finance Minister Christine Lagarde who ruled the step out, a sign that European officials are still wrestling over what to do about Greece’s debt crisis.

Juncker said the group’s adamant stance against restructuring — or giving creditors less than full value of their bond holdings — did not extend to what he and others have called “reprofiling,” or a voluntary offer from bondholders to accept repayment over a longer period.

However, he warned that Greece wasn’t ready yet for such a move, which would only be considered after Greece makes more efforts to raise money from privatization, budget cuts and an overhaul of its economy.

Dutch Finance Minister Jan Kees de Jager earlier acknowledged that ministers had discussed the option of restructuring Greece’s massive debt — something eurozone officials had also so far denied.

“Of course we discuss all kinds of topics, including restructuring,” de Jager said as he arrived at the meeting in Brussels. “But in public, we are very reluctant about discussing and debating restructuring.”

De Jager did not say whether his country favored a restructuring, but he expressed his frustration with Greece’s dire situation.

“At the moment it seems that Greece is not on the right track and it should be first brought back on the right track” before deciding on any new support measures, he told journalists.

That frustration was shared by other ministers, who demanded Greece take further measures to ensure it can cut its budget deficit to the targets set out in its initial bailout program.

The Greek government agreed to privatize even more national assets to help pay its bills and adopt additional austerity measures and economic reforms, Juncker said.

In March, Greece already committed to privatize some 50 billion euros ($71 billion) in assets, such as stakes in national companies and real estate, by 2015, but eurozone ministers complained that they have seen little progress on these efforts.

“I’m not so happy with Greece,” Juncker said, adding that any new measures needed to be endorsed by all political parties in the country.