By Johanna Treeck

BRUSSELS (MNI) – Greece will neither restructure nor reschedule its
debt, former ECB Vice President Lucas Papademos assured Market News
International on Wednesday.

“It is not envisaged that [restructuring] is the outcome said
Papademos, who now acts as economic advisor to Greek Prime Minister
George Papandreou. “This neither desirable nor likely. The Greek
government has excluded this and the European authorities have done the
same.”

Papademos also dismissed the option of debt rescheduling and said
that the Greek government had not discussed such an option with the IMF
and the EU.

While conceding that markets are still not convinced that Greece
will be able to meet its debt obligations, he did not agree that
stretching out the repayment schedule may be the best way to convince
investors that Greece will eventually be able to pay up its debt in
full.

“I think the best way to calm markets is to persevere with the
systematic and effective implementation both of the measures aimed at
reducing the deficit as well as the reforms required to enhance the
growth prospects of the country,” Papademos said.

“After a period of time as progress has been made on the fiscal
front and as policy credibility is increasing, I think markets will calm
down,” he added.

Great efforts made by the Greek government and the people,
supported by the European Union and “monitored thoroughly and assessed
by the IMF, should lead to a positive outcome,” rendering restructuring
or rescheduling unnecessary, Papademos asserted.

After Irish bond spreads hit fresh record highs on Wednesday,
reflecting those of Greece before the explosion of the sovereign debt
crisis in May, Papademos said he expects “the Irish authorities will
take the necessary measures in order to convince markets that the risk
are contained” and that, correspondingly, the spreads will halt their
climb.

Nevertheless, when asked whether he sees a risk that Ireland will
have to tap the E440 billion European Financial Stability Facility
(EFSF), Papademos did not exclude the possibility.

“I do not know, it has to be seen. I believe outcomes and prospects
very much depend on actions,” Papademos asserted.

–Frankfurt newsroom +49 69 72 01 42; Email: jtreeck@marketnews.com

[TOPICS: M$$EC$,M$X$$$,M$$CR$,MT$$$$,MX$$$$]