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UPDATE 1-Greek debt restructuring not an option-EU exec

Published 04/28/2010, 06:40 AM
Updated 04/28/2010, 06:56 AM

* EU Commission says Greek debt restructuring not an option

* It says this is for political reasons

(Adds more quotes, background)

BRUSSELS, April 28 (Reuters) - Restructuring Greece's debt or that of any other euro zone country is not an option, the European Union executive said on Wednesday.

Referring to talks on emergency loans for Greece, European Commission spokesman Amadeu Altafaj told a news briefing: "Debt restructuring in a euro area member state is not an option and is not part of the talks in Athens."

"It is a political decision. Debt restructuring is out of question," he said.

German Chancellor Angela Merkel's Christian Democrats (CDU) said they would raise the subject of forcing investors to take a discount on Greek debt in talks with the IMF and the ECB on Wednesday, a senior party official said on Tuesday.

CDU budgetary spokesman Norbert Barthle said he would raise the issue of "haircuts" on Greek debt when parliamentary groups from the Bundestag lower house met International Monetary Fund Managing Director Dominique Strauss-Kahn and European Central Bank President Jean-Claude Trichet in Berlin.

Bailout talks between Greece, European authorities and the International Monetary Fund began in Athens last week, after Greece asked for as much as 45 billion euros in emergency loans from euro zone governments and the IMF this year.

Greek and European Commission officials have said the first tranche of aid will be paid before May 19, when Athens will need to refinance a maturing 8.5 billion euro bond.

But markets are not convinced that governments will have the political will to reach and sustain an agreement on the aid, especially in Germany, where public opinion is strongly against helping Greece and where Chancellor Angela Merkel's party risks defeat in a regional election on May 9.

(Reporting by Jan Strupczewski, editing by Timothy Heritage)

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