EU considers possible Greek debt restructuring
An old Greek drachma bill is seen on top of modern euro note in central Athens, Greece.
STEVECHIOTAKIS: European finance ministers are meeting in Brussels today, looking at whether Greece will need another round of financial help. The ministers already approved a $111 billion bailout package for Portugal.
Reporter Christopher Werth is in London. Hi Chris.
CHRISTOPHER WERTH: Hey. Good morning.
CHIOTAKIS: So, I remember Greece receiving about a $150 billion dollar bailout last year. Is it going to need even more help?
WERTH: Greece has about an $85 billion funding gap in its budget. And it's really going to struggle to pay back what it already owes. For a while now, we've been hearing from economists that the only way Greece is going to tackle this problem is by "restructuring" its debt. In other words, Greece simply wouldn't pay the full amount it owes. And investors could be out a lot of money. But the question is how to minimize that pain. And what's emerged out of these talks is that this week is a new, pleasant-sounding term, which is "reprofiling."
CHIOTAKIS: Reprofiling? What is that?
WERTH: It's sort of a compromise. Instead of reducing the amount of Greece's debt, what you're doing is extending the time Greece has to pay it back. So say an investor bought a two-year bond. They may get their money back in ten years instead. It may not make investors happy to have to wait for their money. But those investors are still going to get all of their money.
CHIOTAKIS: Can it work, Chris?
WERTH: That's questionable. Here's what Marie Diron of Oxford Economics had to say.
MARIE DIRON: It would need to be accompanied by a new bailout package, as well as Greece saying that it will not be able to pay the total amount of its debts.
Most economists you speak with say you just can't get away from the idea that Greece is going to have restructure all that money it owes.
CHIOTAKIS: Christopher Werth reporting from London. Thanks Chris.
WERTH: Hey thanks.