‘Banks must contribute to costs of aid to Greece'

3 May 2010

‘Banks must contribute to costs of aid to Greece'

"The European banking sector must, by means of of debt restructuring, contribute to the costs of aid to Greece," says SP Member of Parliament and economic affairs spokesman Ewout Irrgang. "They have received a higher rate of interest on Greek state loans in exchange for higher risk. So it would now be dishonest of the banks not to pay some of the costs, while they are profiting from the aid given to Greece."

Ewout IrrgangGreece is struggling with a deficit of almost 14% of GDP and a high national debt, because of which no-one wants to extend more loans to the country. The IMF and the eurozone countries are willing to lend Greece €110bn in the next three years in exchange for the promise that Greece will bring its deficit down below 3% by 2014. “These plans are so radical that the question is one of whether, even if all goes according to plan, the Greeks will in any event be able to repay all of their debts," says Irrgang. "If for this reason alone, some kind of debt restructuring is clearly needed. But it would be unfair if the banks weren't to contribute to the solution of a problem for which they themselves are partly responsible.”

Irrgang is not against aiding Greece but argues that some sort of debt restructuring must form part of this. At the request of the SP and two right-wing parties, Parliament has been recalled from pre-election recess for a plenary debate on the issues involved. This will probably take place this coming Friday.

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