EU: New Greek rescue will not mean restructuring debt

IN THE clearest sign yet that Europe is preparing for a second Greek bailout, an EU spokesman yesterday tried to draw a distinction between “re-profiling” Athens’ debt and “restructuring”.

EU monetary affairs spokesman Amadeu Altafaj said: “Reprofiling is one concept, debt restructuring is a different concept… It doesn’t involve necessarily even the same players and doesn’t have the same consequences.”

His comments fuelled speculation that Greece’s second bailout will involve Eurozone members extending the maturity of its rescue funds, which consisted of a series of bilateral loans from Eurozone members. The EU insists that this would not constitute or lead to a full-scale restructuring or default.

The speculation on Greece came as European finance ministers approved Portugal’s €78bn bailout, which will be borne equally by the IMF, the 27-nation EU bailout mechanism and the 16-nation Eurozone bailout facility. The UK will underwrite Lisbon’s rescue to the tune of €4.81bn through its five per cent contribution to the IMF and its 13.5 per cent EU bailout fund contribution.

The summit proceeded without the scheduled attendance of IMF chief Dominique Strauss-Kahn, who also missed a meeting with chancellor Angela Merkel due to being charged with attempted rape in New York.