Nowotny Says Greece Can Cut Debt Burden Without Contagion

European Central Bank Governing Council member Ewald Nowotny said extending Greece’s debt maturities is a possible way to increase the country’s ability to deal with its debt while avoiding contagion to other countries.

“I believe the question of extending debt maturities is a relevant one,” Nowotny said in a live interview with Austrian television broadcaster ORF. “I believe that ways can be found that on the one hand improve the debt sustainability but don’t imply the risk of negative side effects” for other countries.

“Everything that can reduce risks is positive, for instance an extension of maturities or a reduction of interest rates,” he said. “But that must happen in a way that doesn’t result in a default” and “is accepted by rating agencies,” he added.

“This is something where discussions are being led right now and next week there could be decisions,” he said.

To contact the reporter on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

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