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June 03, 2011 at 07:00 AM
A former director of the Western Hemisphere for the International Monetary Fund (IMF) said on Friday that instead of extending additional loans to Greece, that body should instead urge Athens to restructure its debt and press for haircuts from bondholders.
Reuters reported that Claudio Loser, who assisted in negotiating the bailouts given to Argentina and Uruguay by the IMF, also said that Greece could benefit from abandoning the euro as its currency as it works to straighten out its economy.
He added, however, that such an action would create a major problem for the euro.
"Greece will have to take one or two of the two actions—restructuring with a haircut and maybe abandoning the euro, although I would say abandoning the euro will be more complicated,” Loser said, according to Reuters.
His statement came as Greece prepares to receive yet another bailout from the IMF and the European Central Bank (ECB) and presented a new austerity plan to officials in another attempt to stave off default.
