Head of EU rescue fund warns of Greek debt risks
European Union officials and the International Monetary Fund believe Greece will be able to pay back all of its debts on time but there are risks to that assumption, the head of Europe's rescue fund was cited as saying on Thursday.
"All the responsible authorities -- the International Monetary Fund, the European Central Bank and the European Commission -- are assuming so far that Athens can pay back all its debt,» Klaus Regling, head of the European Financial Stability Facility, told German daily Sueddeutsche Zeitung.
"There are of course risks,» he added.
Earlier this week, ratings agency Standard & Poor’s downgraded Greece by two notches, pushing bonds deeper into junk territory, on fears that the country will restructure its debt and force losses on bondholders after 2013.
Regling played down the risks of a spread of debt troubles in the eurozone, saying markets had come to the conclusion that there were only three countries in the bloc with acute financial problems.
"The danger that one country in the crisis infects another is significantly lower than it was six months ago,» he said. «Attention is focused on three small countries -- Greece, Ireland and Portugal. It is clear that Spain no longer belongs on this list."
His comments come a day after European Central Bank Executive Board member Lorenzo Bini Smaghi warned that there is a risk of the eurozone debt crisis spreading from countries on its rim to others at its core.
ekathimerini.com , Thursday March 31, 2011 (13:33)