Frankfurt - AFP
Greece should declare itself insolvent and restructure its debt in order to restore calm to the markets, the head of Germany\'s second-biggest bank said in a newspaper interview Friday. \"It has to become clear that states have only two options: either they service their debt as agreed or they declare insolvency with all the tough consequences,\" Commmerzbank chief Martin Blessing told the mass-circulation daily Bild. It would not be sufficient for banks just to take writedowns on their balance sheets, Blessing said. \"Greece can\'t be helped and calm restored to the markets without a real restructuring of Greek debt and a reconstruction programme.\" Asked whether banks would voluntarily contribute to resolving the crisis, Blessing replied: \"As I see it that won\'t happen voluntarily, but only if Greece declares itself insolvent.\" In July, banks and insurers agreed to contribute to reducing Greece\'s debt via a 21-percent writedown on their holdings of Greek bonds. But recently there has been growing speculation that Athens needs to reduce the value of its debt by 50 percent -- or perhaps even more -- to make its finances sustainable. Banks would probably need more capital if Athens did declare itself insolvent, Blessing said and called for governments to establish clear rules for all banks quickly so as to create a level playing field and avert harm to the economy.