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Greece's Syriza sees ECB role in cutting euro zone debt overhang
February 12, 2015 / 1:21 PM / 3 years ago

Greece's Syriza sees ECB role in cutting euro zone debt overhang

BRUSSELS, Feb 12 (Reuters) - The European Central Bank could help reduce the euro zone's debt overhang by acquiring all euro zone bonds maturing between 2016 and 2020 as well as the associated interest payments, the chief economist of Syriza, Greece's ruling party, said.

John Milios told a debt seminar in the influential Bruegel think-tank in Brussels that each euro zone country would then buy back its debt from the ECB once their value fell to below 20 percent of that country's gross domestic product.

"The ECB will pay the bill, but it would also keep the profits. By 2040 the ECB would be able to erase all losses through these profits," Milios told the seminar.

The idea would help kick start the economies all over the euro zone, he said, including Italy and Spain.

His remarks come as European Union leaders meet in Brussels with the problem of what to do with Greek debt, which stands at 176 percent of GDP, as one of the issues on the agenda. (Reporting by Jan Strupczewski; Editing by Alastair Macdonald)

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