Goldman Sachs Germany chairman Alexander Dibelius on Friday warned of the dangers of a possible Greek default, urging a restructuring of the country’s debt.
“It cannot be allowed to be led to a Greek default. For this reason a restructuring of the Greek debt is necessary,” Dibelius told the newspaper 'Bild', while he cited a necessary “a mixture of support, discipline and pressure for Greece in order (for it to) return to the road of virtue”.
Dibelius said that although Greece represented only 2.0 pct of the European economy, the country has become a symbol of debt crisis in the Eurozone, stressing that the country's problems cannot be allowed to lead to the failure of a large monetary system.
Professor Willem Buiter, the chief analyst for Citigroup, said Greece needed a 50-pct cut in its debt, although a political decision necessary for the restructuring was being delayed.
“Economic reasons impose the immediate restructuring of the Greek debt, but political reasons delay this decision, waiting for the completion of measures to deal with any turbulence in the banking system,” Buiter told "Frankfurter Allgemeine Zeitung". The German economist said more than 50 pct of the Greek debt, totaling 360 billion euros, is held by foreign investors.