Greek Debt Restructuring "Unavoidable", Pro Says

Thursday, 26 May 2011 | 7:48 AM ET

Think a Greek debt restructuring can be avoided? This pro says no — and he's not even sure the euro zone should hold together.

"It was a wrong signal to send out a year ago to start with this rescue package," says Karsten Schroeder of Amplitude Capital. With all that sovereign debt, and with austerity measures in place, it is hard to see how Greece and other troubled countries will get their economies back in balance - and thus hard to see how the euro zone can attain sustained economic stability, he told CNBC.

So what should happen? Why, restructuring, Schroeder says.

With yields on some Greek debt approaching 20%, "Investors will expect that there will be a writeoff, and I think that just should be addressed now."

That's not all. Schroeder also argues that as a last resort,

"One may consider, depending on the situation in each country, that they might opt out of the euro if they have no other means to recover" economic equilibrium, he says.

Now THAT would make for exciting trading.

You can watch the whole conversation right here.

CEO: Euro Bailouts Send 'Wrong Signal'
"I think that it was a wrong signal to send out a year ago to start with this rescue package because the premise should be how can we help those (euro zone) countries to come back on a healthy ground and it should not be a rescue package for the banks," Karsten Schroeder, CEO of Amplitude told CNBC Wednesday, adding that harsh austerity measures combined with bailouts are unlikely to rebalance troubled economies.


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