Ex-PM says Greece should restructure debt--paper

ATHENS (Reuters) - Greece should restructure its debt soon to help rebuild its economy, former Socialist Prime Minister Costas Simitis was quoted as saying on Saturday.

There is growing speculation that the euro zone member will eventually need to restructure its debt, despite official denials, and that Germany, the European Union's wealthiest member, is working on such a plan.

"A well-prepared restructuring will essentially improve our situation," Simitis told To Vima newspaper in an interview. "As long as it is being delayed, the debt which cannot be restructured gets bigger."

Simitis, chief architect of Greece's entry into the euro in 2001, was expelled from the Socialist PASOK parliamentary group in 2008 for publicly attacking party leader George Papandreou's call for a referendum on the EU's Lisbon Treaty.

Papandreou, now prime minister, has repeatedly ruled out a restructuring.

"The next 15-20 years should be a period when we rebuild a stable economy with optimism and rejoin European developments and not a period of misery when we will be living at the mercy of the world economy's wobbles," Simitis added.

But he stressed that a debt restructuring would not be a panacea, saying Greece should stick to the terms of an EU/IMF bailout and respect EU treatiy rules on public debt and budget deficits.

Greece unveiled plans to sell stakes in key state firms and make additional budget savings on Friday but failed to quell fears of debt restructuring fanned by a German official's comments.

Another Greek newspaper, Kathimerini, quoted unidentified European Commission on Saturday as saying Greece had already raised the issue of extending the maturity of its debt held by private creditors to its EU and IMF lenders.

The EU executive and the ECB rejected its proposal for fear such a move would hurt other European economies, the paper said.

A poll published on Saturday showed the ruling Socialists' support declined slightly from last month, but they still enjoy a lead over conservative opponents despite unpopular austerity.

Public Issue's poll for Kathimerini showed backing for PASOK stood at 33.5 percent versus 27 percent for the opposition conservatives.

According to a Kapa Research poll conducted for To Vima and also released on Saturday, some 21.7 percent of Greeks would vote for PASOK, if elections were held now, versus 20.1 percent for the main opposition New Democracy party.

That poll also showed 41.5 percent of respondents believe a debt restructuring is likely to happen in the next two years.

(Reporting by Angeliki Koutantou; editing by Mark Heinrich)