Talk of a possible Greek default gains pace

Greek Finance Minister Evangelos Venizelos was quoted by two newspapers as saying an orderly default with a 50 percent haircut for bondholders was one of three possible scenarios for resolving the heavily indebted euro zone nation's fiscal woes.

Venizelos described the reports in a statement as an unhelpful distraction from the central task of sticking to Greece's EU/IMF bailout program.

European Central Bank governing council member Klaas Knot told a Dutch daily a Greek default could no longer be ruled out, the first ECB policymaker to speak openly of the prospect.

"It is one of the scenarios. I'm not saying that Greece will not go bankrupt," Dutch daily Het Financieele Dagblad quoted him as saying.

"All efforts are aimed at preventing this, but I am now less certain in excluding a bankruptcy than I was a few months ago," Knot said, adding that he wondered "whether the Greeks realize how serious the situation is".