LIMASSOL, Cyprus May 28 (Reuters) - A eurogroup working committee is looking into how a 'soft' Greek debt reprofiling might work, Dutch Finance Minister Jan Kees De Jager said on Saturday.
'The euro group is doing research for reprofiling; what can you do on reprofiling, is it possible a without credit event,' De Jager told journalists. 'It's an investigation, and we have to wait for the outcome of it.'
Analysts have described reprofiling as a form of debt rescheduling, with the time for repayment being extended but the value of the debt not marked down.
Greece's debt currently stands at around 150 percent of gross domestic product, a level considered unsustainable, particularly given that the size of the economy has contracted and any growth is likely to be minimal.
Many debt analysts expect some form of restructuring in coming months, although such a move had been repeatedly dismissed by Greek authorities and the European Central Bank.
De Jager said there was a distinction between different forms of rescheduling.
Soft reprofiling, as such, (is) not (to) have a (valuation reduction or) haircut, but would mean a lengthening of Greek bonds otherwise it wouldn't be soft anymore probably. It would be a lot more than that,' he said.
In recent days, credit rating agencies have said they would probably classify most forms of debt extension as a default, which could sow panic in markets and lead to downgrades of other countries.
Athens kick-started a stalled privatisation programme on Monday and promised tougher austerity measures and tax hikes to meet EU/IMF conditions to get its next loan tranche in June, vital to keep Greece from defaulting.
Without the IMF on board, the Netherlands would not pay its contribution into the next Greek tranche, De Jager said.
'(This stance is) also supported by other especially northern European countries, but even in Italy also. It's vital that Greece live up fully, the full 100 percent, to IMF conditions and if not, if there is a negative review and the IMF does not pay out, we also will not pay out,' he said.
(Reporting by Michele Kambas and George Psyllides; Editing by John Stonestreet) Keywords: GREECE DEBT/REPROFILING (michele.kambas@thomsonreuters.com; 357 22469607; Reuters messaging michele.kambas.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.
'The euro group is doing research for reprofiling; what can you do on reprofiling, is it possible a without credit event,' De Jager told journalists. 'It's an investigation, and we have to wait for the outcome of it.'
Analysts have described reprofiling as a form of debt rescheduling, with the time for repayment being extended but the value of the debt not marked down.
Greece's debt currently stands at around 150 percent of gross domestic product, a level considered unsustainable, particularly given that the size of the economy has contracted and any growth is likely to be minimal.
Many debt analysts expect some form of restructuring in coming months, although such a move had been repeatedly dismissed by Greek authorities and the European Central Bank.
De Jager said there was a distinction between different forms of rescheduling.
Soft reprofiling, as such, (is) not (to) have a (valuation reduction or) haircut, but would mean a lengthening of Greek bonds otherwise it wouldn't be soft anymore probably. It would be a lot more than that,' he said.
In recent days, credit rating agencies have said they would probably classify most forms of debt extension as a default, which could sow panic in markets and lead to downgrades of other countries.
Athens kick-started a stalled privatisation programme on Monday and promised tougher austerity measures and tax hikes to meet EU/IMF conditions to get its next loan tranche in June, vital to keep Greece from defaulting.
Without the IMF on board, the Netherlands would not pay its contribution into the next Greek tranche, De Jager said.
'(This stance is) also supported by other especially northern European countries, but even in Italy also. It's vital that Greece live up fully, the full 100 percent, to IMF conditions and if not, if there is a negative review and the IMF does not pay out, we also will not pay out,' he said.
(Reporting by Michele Kambas and George Psyllides; Editing by John Stonestreet) Keywords: GREECE DEBT/REPROFILING (michele.kambas@thomsonreuters.com; 357 22469607; Reuters messaging michele.kambas.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.