MILAN/VIENNA: European Central Bank policymaker Ewald Nowotny Tuesday favored giving Greece more time to repay its financial aid rather than issuing new loans, and he and another ECB official ruled out a debt restructuring. Nowotny and ECB Executive Board member Lorenzo Bini Smaghi both said a Greek debt restructuring would damage both Greece and other countries in the 17-member euro zone. “You have to be aware that this would immediately have massive consequences for the Greek banking system and for the banking system overall,” Nowotny told Austrian radio. “That would only heighten the crisis.” Nowotny said it was primarily up to Greece to put its financial house in order and that a restructuring must be avoided. Asked whether Greece would get fresh loans, Nowotny said: “The first step has to be on Greece's side. Only when we have a clear view here can we consider whether the existing program must be rounded out, but that is something one can judge only in the weeks ahead.” Greece expects to receive a new aid package totalling nearly 60 billion euros as soon as next month, news agency Dow Jones reported a senior Greek government official as saying Tuesday. The Greek government was not immediately available for comment on the report, which drove the euro higher against the dollar and narrowed Greek debt spreads. “It does not have to be fresh loans. It could also be a question of the time horizon of how long one has to repay,” Nowotny said.
