Greece says recovery is being set back by debt restructuring talk

GREECE’S central banker said yesterday that talk of debt restructuring is hurting the country as it struggles to exit the fiscal crisis that has shaken the eurozone.

“I believe that even mere talk of debt restructuring hurts the country,” Bank of Greece governor George Provopoulos told local Greek press.

He said the negative impact of a debt restructuring would far exceed the short-term pain caused by the austerity measures Greece is implementing.

“The political and economic impact of debt restructuring would far exceed the short-term pain of fiscal adjustment. Debt restructuring would spark an uncontrollable chain reaction which would start a new, long-term cycle of a lack of credibility for the future of Greece’s economy,” he said.