AACHEN, Germany (Reuters) - The European Central Bank does not rule out private sector involvement in a new deal to aid Greece but is firmly opposed to outright debt restructuring, ECB Vice-President Vitor Constancio said on Thursday.
EU and ECB policymakers have differed over the shape of a second rescue for Greece currently being worked on across Europe, with the euro zone’s central bank arguing firmly against any form of restructuring.
ECB hawk Juergen Stark offered a glimmer of compromise on Wednesday, saying a voluntary deal for investors to keep renewing their Greek debt holdings might be acceptable as part of a broader package.
“We have never refused every form of private sector involvement in Greece,” Constancio told reporters when asked about the impact on investors who have loaned money to Greece.
“Some forms of private sector involvement which are voluntary — there are many forms — and some forms we have always admitted as possibilities,” he added, speaking on the sidelines of an event in Germany.
He declined to give examples but said the bank’s concerns had always been about avoiding a technical default on Greece’s debt — something European officials have been working to find a way around in talks with Athens.
European officials are racing to come up with a politically palatable solution that will bail out Greece — still firmly locked out of financial markets — for a second time and allow it to service its huge debt next year.
Investors are hopeful a solution will be found and a government official said that Athens intends to present a fresh austerity plan on Friday. But rating agency Moody’s cut Greece deeper into junk territory on Thursday and said there was an even chance of eventual default.
Speaking at the same event, Eurogroup chairman Jean-Claude Juncker said a decision would be made based on a report by EU, IMF and ECB inspectors now in Greece, which should land in coming days.
He gave no new indication of the likely terms and said there were no plans for an emergency meeting of euro zone finance ministers to approve any deal.
“We will take this report under examination and discuss the matter and I would like us to come to a final conclusion as far as Greece is concerned before the end of this month,” he told reporters.
“My personal feeling is that Greece will have a new program submitted under strong conditionality. (...) Greece will have to implement a very ambitious privatization program, it has to implement it, not only announce it, and Greece will have to launch a certain number of structural reforms.”
Reporting by Sakari Suoninen; writing by Patrick Graham, editing by Catherine Evans