European banks will probably have to take larger write-downs on Greek debt and must negotiate haircuts as big as necessary to resolve a very dangerous situation for the global economy, Canadian Finance Minister Jim Flaherty said today.
"It is quite clear the Greek government is not in a position to repay the indebtedness so then it's a question of how big the haircuts are," Flaherty said on RTÉ's Morning Ireland.
"What is necessary is probably more than they negotiated before,'' he said.
He warned that governments must take whatever action is necessary to resolve Greece's problems and to build a firewall around Greece as it presented a very dangerous situation for the global economy.
Greece's 2010 deficit estimate raised
Greece's statistics office has said the country's budget deficit reached 10.6% of gross domestic product (GDP) in 2010. The office revised the data slightly higher from a previous estimate of 10.5% of GDP.
The statistics office also revised the 2010 general government debt figure to 144.9% of GDP from 142.8% of GDP.
