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(Updates to add Ackermann comments from second paragraph.)
Sept. 30 (Bloomberg) -- Greece may ultimately face a form of debt restructuring following efforts by European policy makers to prevent its woes from spreading to other countries, said Deutsche Bank AG Chief Executive Officer Josef Ackermann.
“We will probably have some sort of restructuring of the Greek debt,” Ackermann, who heads Germany’s biggest bank, said in a speech in Zurich today. The bank chief cautioned against moving hastily, saying his chief concern was that other countries would end up in a similar situation.
European leaders are fighting to ease investor concern that Greece’s sovereign debt crisis will spread to Spain and Italy and cause losses for the region’s banks. German lawmakers approved an expansion of the euro-area rescue fund’s scope yesterday, and bondholders are in the midst of consultation with authorities on a debt swap as part of the bailout.
Greece’s debt burden in terms of gross domestic product is set to come down to about “100 percent in 2020,” said Ackermann. “That is still not enough, but it’s a good step,” and the Greeks need to “do more.”
With the European Commission expecting the overhauled 440 billion-euro ($592 billion) European Financial Stability Facility in place by mid-October, euro finance chiefs will discuss next week how to speed up plans for a permanent rescue fund that provides more capital and a tool for managing defaults.
The current plan by European policy makers is a “first step and the debt buyback is a second step,” said Ackermann, 63. Greek “privatization efforts are a third,” while the extension of maturities will be another.
--Editors: Chris V. Nicholson, Edward Evans
To contact the reporters on this story: Matthias Wabl in Zurich at firstname.lastname@example.org; Nicholas Comfort in Frankfurt at email@example.com
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