The idea that a Greek debt restructuring could be carried out in an orderly way is a fairytale, European Central Bank board member Lorenzo Bini Smaghi told the Financial Times in an interview published on Monday.
He also ruled out the idea of a debt 're-profiling', or voluntary extension of maturities, and said a Greek default would bring down the country's banking system.
If you look at financial markets, every time there is mention of a word like 'restructuring' or 'soft restructuring' they go crazy -- which proves that this could not happen in an orderly way, in this environment at least, he said. Instead, Greece could reduce its debt by selling assets and changing its tax and expenditure systems.
(Reporting by Mark Trevelyan, editing by Myra MacDonald)