FRANKFURT (MNI) – Greece has no need to restructure its debt or
withdraw from the Eurozone, the European commissioner for economics and
finance said in an interview published Friday.

While Olli Rehn did not rule out in principle the creation of an EU
insolvency procedure, as proposed by Germany, but he warned of the
institutional obstacles.

Rehn dismissed as “surrealistic” a scenario of Greece’s exit from
EMU. “The Eurozone won’t get shrink but rather expand,” he told the
German business daily Handelsblatt. “Estonia will soon enter.”

“Greece has no need for a haircut on its debt,” he said. “The
government in Athens is sticking to its course of budget consolidation
and has launched structural reforms of its pension system and labor
market.”

Pressed repeatedly by the German paper about the need for measures
to deal with an eventual sovereign debt default, the commissioner
acknowledged that German Finance Minister Wolfgang Schaeuble had argued
for an orderly insolvency procedure.

“However, the EU would have to modify the Lisbon Treaty for that,
which we know is very laborious,” he said.

Asked pointedly whether he was opposed in principle to an orderly
insolvency procedure, Rehn replied: “I didn’t say that. But I am now
focused on reforms that are possible without amending the treaty. We
need rapid ways to counter excessive government debt and economic
imbalances in the Eurozone effectively.”

For the Handelsblatt, in the subtitle to the interview, this
response means that Rehn “publicly calls for an orderly insolvency” for
Eurozone members. This suggests either that Rehn may have given
additional answers off the record or that the newspaper is misleading
its readers.

Rehn said he was not opposed in principle to tougher sanctions for
governments that fail to consolidate their finances but that it was up
to the members of EU President Herman Van Rompuy’s Task Force to decide.
If there were such an accord, the entry of Croatia to EMU would be an
opportunity to modify the treaty, he suggested.

A treaty amendment would also be needed to allow sanctions to be
imposed automatically unless a majority of EMU finance ministers were
opposed, Rehn said. While objecting to the word “automatic” as too
“clinical,” he conceded that this would facilitate the application of
sanctions.

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