Greece’s Christodoulou Says Spain May Need Writedown Before Aid

Spain may need to impose losses on bondholders before it would be able to receive a “sizable” bailout from international peers, Petros Christodoulou, former head of Greece’s debt office, said in a BBC Radio 5 interview.

“There will be some intervention to stabilize” Spain and Italy’s debt, Christodoulou told the radio station today. “If there is no sufficient stabilization” Europe is moving in the direction that “before sizable official money is poured into a country, there has to be some sort of private-sector involvement,” he said.

Christodoulou also said buying of government debt by official institutions is “poisonous for the balance of the debt because this is subordinated to the official money.”

Bondholders wrote off more than 100 billion euros ($127 billion) when Greece restructured its debt in March.

To contact the reporter on this story: Paul Dobson in London at pdobson2@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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