‘Austerity the only solution for Greece’

EUROPEAN Central Bank Governing Council member Christian Noyer ruled out a restructuring of Greece’s debt, calling it a “horror story” that would leave the nation shut out of financing for years.

“There’s no solution possible” for Greece other than its austerity programme, Noyer, Bank of France governor, said. “Restructuring is not a solution, it’s a horror story.” If the country fails to meet the terms of its bailout, Greek government debt will be “ineligible as collateral” at the ECB, he said.

ECB leaders and European Union policy makers are clashing over how to prevent the currency region’s first default, after €256 billion in bailouts to Greece, Ireland and Portugal failed to stop contagion from the debt crisis. A year after its €110bn rescue, Greece remains shut out of financial markets and the cost of insuring its debt against default is at a record high.