Van Rompuy: Greek debt sustainable

The opinion that Greece's public debt is sustainable and should not be restructured was repeated by European Council President Herman van Rompuy in an interview published by the Belgian newspaper "De Standaard" on Tuesday.
According to the former Belgian premier, a restructuring of Greek debt was not inevitable and he criticised "impatient" economic pundits for rushing to predict the country's failure and not giving enough time for measures to kick in, noting that Belgium had been given seven years to tame a deficit of 7.5 percent in the 90s and Sweden eight years to tackle its own deficit problems in the late 80s and early 90s.

He voiced the opinion that Greece's debt would be "tolerable" if the country were given enough time to deal with it and stressed that Greeks were not letting things take their course but were pushing through major reforms that included a 50 billion euro privatisation plan that he described as "gigantic" for such a small country.

According to Van Rompuy, the benefits of restructuring would not offset its disadvantages while he said the severity and rapid pace of the reforms was unavoidable, despite the blow to consumer sentiment, in order to restore the blow to market confidence inflicted by revelations that Greek statistics had been 'doctored'.

He also pointed out that the loans to Greece were not a case of European solidarity, stressing that they were not gifts and that tax-payers would actually gain as a result, since the interest on the loans to Greece was higher than the interest they paid on loans to create the European financial support fund.

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