FRANKFURT – European Central Bank officials warned Tuesday of catastrophic consequences if Greece is allowed to restructure its sovereign debt.

“Default or debt restructuring is a dramatic economic and social event for the country which experiences it — I would call it political ‘suicide’ — which leads many into poverty,” Executive Board member Lorenzo Bini Smaghi said in Florence. Fellow board member Juergen Stark said restructuring “wouldn’t be a solution to the problems that Greece needs to overcome.”

Concern at the Frankfurt-based ECB is growing after Greek bond yields soared to all-time highs on speculation the government will be unable to meet its refinancing needs under the conditions of its current $158 billion bailout package. Greece’s credit rating was Monday cut two levels by Standard & Poor’s, which said further reductions are possible as the risk of default rises.

“The ECB is fighting to keep politicians away from the restructuring debate,” said Nick Kounis, head of macro research at ABN Amro in Amsterdam. “They are worried that people are starting to consider it in important capitals.”

The strategy may be working. Germany, which last month indicated a restructuring was possible, now says giving more aid to Greece may be preferable.

Record financing costs are dimming expectations that Greece will be able to sell debt at manageable rates. “It was expected that Greece would be able to refinance itself via the market next year and there now are strong indications that won’t happen,” ECB council member Ewald Nowotny said Tuesday.

Greece can’t meet payments on the money it already owes “and now the European Union’s talking about lending them more money,” Mark Grant, managing director at Southwest Securities Inc., told Pimm Fox on Bloomberg Television’s “Taking Stock.” Greece “is bankrupt, and the European Union is going to have to face up to that. The country has to default or restructure.”