UPDATE 1-Euro restructuring could overshadow Lehman-ECB's Stark
* ECB's Stark: risks of second Lehman if state restructures
* ECB opposes Greek restructuring, says would be damaging
* Stark says reform programmes mean debt will be repaid
BERLIN, April 23 (Reuters) - A sovereign debt restructuring in a euro zone state could trigger a banking crisis worse than that unleashed by the collapse of Lehman Brothers, ECB Executive Board member Juergen Stark said. In comments released on the Web site of German broadcaster ZDF on Saturday, Stark raised the spectre of the U.S. investment bank's famous collapse to underline the European Central Bank's opposition to Greece restructuring its mountain of debt.
"A restructuring would be short sighted and bring considerable drawbacks," he said. "In the worst case, the restructuring of a member state could overshadow the effects of the Lehman bankruptcy."
The bankruptcy of Lehman Brothers in September 2008 virtually froze credit markets and pushed governments into huge bailouts of their banking sectors.
Rising expectations that Greece will have to restructure a debt load that is one-and-a-half times its annual output has raised doubts about whether leaders can restore confidence in the 12-year-old euro currency experiment.
In the interview, Stark criticised the debate over Greece, which he said was being monitored closely but is not insolvent, and would be able to pay its debts after an international bailout agreed last May.
"The discussion about restructuring in the euro zone is based on false assumptions that one state or another is insolvent," he said.
"The EU and IMF adjustment programmes were based on analyses of the ability to repay debt," he said. "Aid would not have been disbursed if the ability to repay debt after the completion of the reform programmes could not be ensured." (Writing by Brian Rohan; Editing by Toby Chopra)
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