G-20: OECD Gurria: Greek Debt Sustainability Depends More On Policies Than PSI
First Published Saturday, 25th February 2012 03:37 pm - © 2012 Dow Jones
MEXICO CITY -(Dow Jones)- Greece's debt sustainability depends more on government policies than the success of a bond exchange with the private sector, the head of the Organization for Economic Cooperation and Development, Angel Gurria, said Saturday.
Greece has launched a bond exchange to write off more than 100 billion euros ($135 billion) of its sovereign debt, which is expected to be concluded by mid-March. Combined with bailouts from its euro-zone peers and the International Monetary Fund, Greece aims to bring its debt down to around 120% of gross domestic product by 2020.
Gurria said the building of a powerful financial firewall in the European Union has come around 18 months to two years too late.
"Every day the cost of...indecision is enormous," Gurria said. "At some point there has to be a declaration of victory."
The head of the OECD was speaking ahead of the meeting of finance ministers and central bankers in Mexico City, where Greece and the construction of a firewall in Europe will be discussed.
Gurria also repeated his call for governments aggressively to pursue structural reforms as there is no room for fiscal or monetary stimulus. Even some quantitative easing has exhausted its potential, he said.
He also warned that protectionism is "rearing its ugly head" and said policy makers must fight it at every turn.
-By William Horobin, Dow Jones Newswires; +33 1 4017 1737;
