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Barclay’s Capital Says Too Early To Restructure Greek Debt
Greece’s public debt dynamics may be at a critical point but it is still too early to consider restructuring, says Piero Ghezzi, head of economics at Barclays Capital, the FT reports.
“This debt-dynamics fragility explains to some extent why yields on Greek government bonds have remained stubbornly high,” he said.
“Significant unknowns still exist about Greece’s ability to continue implementing its fiscal adjustment and its ability to grow. Until those are clarified, it is not possible to be categorical about the solvency of the country,” Ghezzi says, pointing to the need of an orderly restructuring.
“This is crucial. If the alternative to a moderate restructuring today is a messy default in the future, the advantages of doing something now increase. But we don’t think that trade-off exists…By waiting, Greece is not making the problem worse, as it is undertaking a major part of the fiscal adjustment that it would need to make anyway.”
(Capital.gr)
Greece’s public debt dynamics may be at a critical point but it is still too early to consider restructuring, says Piero Ghezzi, head of economics at Barclays Capital, the FT reports.
“This debt-dynamics fragility explains to some extent why yields on Greek government bonds have remained stubbornly high,” he said.
“Significant unknowns still exist about Greece’s ability to continue implementing its fiscal adjustment and its ability to grow. Until those are clarified, it is not possible to be categorical about the solvency of the country,” Ghezzi says, pointing to the need of an orderly restructuring.
“This is crucial. If the alternative to a moderate restructuring today is a messy default in the future, the advantages of doing something now increase. But we don’t think that trade-off exists…By waiting, Greece is not making the problem worse, as it is undertaking a major part of the fiscal adjustment that it would need to make anyway.”
(Capital.gr)
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