Jean-Claude Juncker does not rule out a new debt "haircut"

Jean-Claude Juncker, candidate for the Presidency of the European Commission, did not rule out the possibility of a new Greek debt "haircut" and admitted that bail-out programmes many times entail "excessive social cruelty".

The former prime minister of Luxembourg and former head of the Eurogroup said in an interview to Stuttgarter Zeitung that he believed Greece was on the right track, but rejected the possibility of a eurobond issue.

He acknowledged that lenders were not particularly preoccupied with the situation in the countries under bailout programmes and pledged that as president of the Commission, he would try to introduce a social impact study for future programmes.

The European People’s Party candidate noted that programmes were now having some positive results. He added that Spain’s banking problem had been solved, Portugal was exiting the bailout programme and Ireland had completed its own programme. "And Greece is on the right track", he said.

Asked whether Greece can get a new debt "haircut" after having met its obligations, Juncker pointed out he negotiated day and night with bank representatives and international lenders. He said he did not wish any Eurogroup head to have to go through such a process again, noting though it was not something he could definitely rule out.
Regarding the possible issue of a Eurobond, he noted that he raised the issue at the end of 2010 as there were no tools to defend against the crisis.

"This is not the case nowadays. For this reason, there is no such issue now" he reiterated.