ECB nominee Draghi rejects debt restructuring option for Greece
\'A default would not address the root causes of the sovereign debt crisis,\' he said, noting that it would still leave open the question of how to bridge Greece\'s deficit, lead to the capital of Greek banks being \'completely wiped out\' and come with the risk of contagion.
\'Unless there is more money put in place or the liabilities of the country or the banks that operate in the country are guaranteed somehow, the default becomes a very, very difficult procedure,\' he told lawmakers on the European Parliament\'s economics committee.
\'All in all, the cost seems to outweigh the benefits,\' he added.
The 63-year-old Italian is the only nominee for the position of ECB president, due to be vacated by current ECB chief Jean-Claude Trichet in October. EU leaders are expected to sign off on his appointment as the eurozone central bank\'s third president at a summit on June 24.
The European Parliament is also due to weigh in on his candidacy on June 23.
His statements on Tuesday came as eurozone finance ministers gathered in Brussels to discuss how to prevent a Greek bankruptcy.
The country last year secured a 110-billion-euro (159-billion-dollar) bailout, but is thought to need another 80-120 billion euros to keep it solvent beyond 2012.
Germany has suggested making banks accept an extension of debt repayments on their Greek bonds, but the ECB has insisted that any move by financial institutions be \'voluntary,\' to avoid it being classified as a default by credit rating agencies.
Draghi pointed to his own country\'s experience in the 1990s, saying that Italy at the time faced worse conditions than the current bailout recipients - including Greece - but still managed to redress its finances without any outside support.
\'It took a long time, but ... what I\'m saying is it can be done,\' he said. \'And the overall present conditions are more favourable than what they were in the 90s. We (have) to finance temporary liquidity shortages, but we have to be aware of the cost and ... we have to have faith in the fact that it can be done.\'
Draghi also on Tuesday had to again defend his 2002-2005 stint at the Goldman Sachs investment bank, which was criticized last year for helping Greece massage its public accounts to help it join the eurozone in 2001.
Draghi denied anew that he was involved in those operations. He also said his record shows that he can be tough on banks despite his time spent in the private sector.
\'I can be seen by unbiased people as having acted with integrity while I was at Goldman,\' he told the lawmakers.
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