Greece has ruled out default and supports the idea of borrowing from the European Financial Stability Facility (EFSF) rescue fund to buy back part of its debt, the country's finance minister said on Sunday.
Eurozone member states are looking to increase the effective lending capacity of the EFSF from around 250 billion euros to 440 billion to contain a sovereign debt crisis troubling the bloc but Germany is reluctant to agree.
Greece, which is receiving emergency funding to avoid defaulting on its debt mountain under a 110 billion euro bailout agreed in May last year, is looking for ways to lighten debt servicing loads.
Buying back some of its battered bonds below par with cheap EFSF funding would help the overborrowed country reduce its gross debt and a debt-to-GDP ratio expected to hit at 157 percent in 2013.
"We have ruled out anything that implies default on the country's obligations to holders of Greek bonds and hence our economic marginalisation," Finance Minister George Papaconstantinou told Ethnos newspaper in an interview.
"We support and seek decisions that relate to better terms of borrowing and public debt management, including stretching out the repayment period of the (EU/IMF) bailout loan, which has already been agreed, but also better borrowing terms from the European fund (EFSF) and the capability to buy back part of our debt," he said.
The EFSF's effective lending capacity is about 250 billion euros, well below the facility's 440 billion euro size, due to guarantees built into it to maintain a triple-A rating.
Germany and France want talks on changes to the EFSF to be linked to boosting eurozone competitiveness through higher retirement ages, national laws to cap debt, a common corporate tax base and an end to wage indexing to inflation.
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