Awwal 30, 1432 H/March 5, 2011, SPA -- Greece must negotiate with private bondholders to extend the repayment period of its debt, an economic adviser to German Chancellor Angela Merkel told a Greek newspaper on Saturday, according to Reuters. If Greece pursues such talks, it would make it easier for Germany to agree extending the repayment period of the loans the debt-laden country has obtained under a 110-billion-euro ($154- billion) EU/IMF bailout, Real News quoted Lars Feld as saying in an interview. Lowering the interest rate on Greece's bailout loans is not likely to be part of the package, he added. "Extending the repayment period of (the bailout) loans is something Germany could agree with, especially if such an extension is also taken into account in negotiations with private creditors," Feld said. "Greece should actively pursue such a strategy," said Feld, who this month joins a panel of five advisers who set the guidelines for Germany's economic policy. "Germany will oppose lowering the interest rate because Greece is already treated relatively favourably, considering what it would have to pay had it not received any help," he added. Greece last year became the first euro zone country to obtain an EU/IMF bailout to avoid bankruptcy. But investors doubt whether the country can sustain the pain of further austerity to avoid a debt restructuring. His comments came before euro zone leaders meet on March 11 to hammer out a comprehensive package of measures to deal with the debt crisis. EU heads of government are expected to sign off on the deal at a meeting in Brussels on March 24-25. If a debt extension fails to resolve Greece's debt problems, Feld said, it could buy back some of its debt with the help of the euro zone's financial rescue mechanism. "If this (debt extension) is not enough, then Europe's financial stability mechanism could extend credit to Greece to help it buy back its bonds on the market at lower prices."
