Private-sector bailout role may be 'more costly'

European Central Bank executive board member Lorenzo Bini Smaghi has said a solution to Greece’s debt crisis that involves the private sector may be more costly to governments than dropping such plans.

While “the attempt to involve private creditors in the financing of the Greek adjustment programme” is “generally welcomed by some countries’ taxpayers”, it “can under certain circumstances . . . lead to outcomes which are even more costly”, he said.