Greece May Need Restructuring in ‘Summer,’ Merkel Ally Says

Greece may not be able to avoid restructuring its debt before summer’s end, said Otto Fricke, the parliamentary budget spokesman for Chancellor Angela Merkel’s Free Democratic Party coalition partner.

“The big question is: will Greece make it through summer without buckling and having to find some means of restructuring its debt,” Fricke said today by phone. “The signs aren’t good though I defy any easy predictions.”

Greek two- and 10-year government bonds slumped today, driving yields to the highest since before the introduction of the euro, amid concern the nation won’t be able to avoid defaulting on its debt.

European Central Bank Council member George Provopoulos said today that a restructuring of Greece’s debt is neither necessary nor desirable, echoing Finance Minister George Papaconstantinou, who said on April 16 that “the pain and the cost” of restructuring the nation’s debt would be greater than repaying lenders.

To contact the reporter on this story: Brian Parkin in Berlin at bparkin@bloomberg.net

To contact the editor responsible for this story: Alan Crawford at acrawford6@bloomberg.net

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