OECD Secretary General Jose Angel Gurria said he thinks it would be a “good idea” for investors to extend the maturities of Greece’s debt to allow the country more time to implement fiscal restraint.
Gurria, head of the Paris-based Organization for Economic Cooperation and Development, said a rescheduling of the country’s debt would be in the interests of bondholders because it increases the likelihood of repayment.
“I think it’s a good idea to extend the maturities of the payments, give time for policies to work,” Gurria said in an interview today in Ottawa, where he was attending a conference. “Then, after a while, see if there needs to be a reduction in the nominal size of the debt, which is generally known as restructuring,” he said.
Policy makers have focused on bond rollovers as a pillar of any new aid package for Greece. The step would be favored by the European Central Bank, according to two officials familiar with the situation, because it would skirt the risk of any agreement being classified as a default. Investors may be given preferred status, higher coupon payments or collateral, said two other European Union officials familiar with the situation.
A rescheduling “is in everybody’s interests,” Gurria said. “It gives investors a better opportunity of being paid in the end.”