* 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 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)