ATHENS, Jan 22 (Reuters) - Greece's central banker said in a newspaper interview on Sunday that talk of debt restructuring is hurting the country as it struggles to exit a huge fiscal crisis that has shaken the euro zone.
'I believe that even mere talk of debt restructuring hurts the country,' Bank of Greece governor George Provopoulos told Sunday's Ethnos newspaper.
Provopoulos also said the negative impact of a debt restructuring would far exceed the short-term pain caused by the austerity measures Greece is implementing and added that banks and government bond holders would also be negatively affected.
'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.
'It would also have immediate and significant negative consequences on pension funds, banks and all those holding government bonds,' said Provopoulos, a European Central Bank Governing Council member.
(Reporting by Renee Maltezou and George Georgiopoulos) Keywords: GREECE CENBANKER/ (renee.maltezou@reuters.com; +30 210 3376439, Reuters Messaging:renee.maltezou.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
'I believe that even mere talk of debt restructuring hurts the country,' Bank of Greece governor George Provopoulos told Sunday's Ethnos newspaper.
Provopoulos also said the negative impact of a debt restructuring would far exceed the short-term pain caused by the austerity measures Greece is implementing and added that banks and government bond holders would also be negatively affected.
'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.
'It would also have immediate and significant negative consequences on pension funds, banks and all those holding government bonds,' said Provopoulos, a European Central Bank Governing Council member.
(Reporting by Renee Maltezou and George Georgiopoulos) Keywords: GREECE CENBANKER/ (renee.maltezou@reuters.com; +30 210 3376439, Reuters Messaging:renee.maltezou.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.