–Money Supply Growth Very Moderate, Infl Expectations Firmly Anchored

FRANKFURT (MNI) – No final deal has been reached between Greece and
its international creditors, European Central Bank Executive Board
member Joerg Asmussen said Wednesday, denying a report to that effect in
a German newspaper.

“There is so far no final agreement of the troika with the Greek
government. We are making progress in Athens but we are not there,”
Asmussen told Germany’s ARD television.

German daily Sueddeutsche Zeitung late Tuesday reported Eurozone
member states have agreed to give Greece’s government an extra two years
– until 2016 – to bring its budget deficit down to 3% of GDP, as well as
concessions on its schedule for privatizations and implementing
structural reforms.

Germany’s finance ministry also denied the report, according to
German daily Frankfurter Allgemeine Zeitung Wednesday, citing senior
finance ministry official Steffen Kampeter.

Asmussen reiterated that any delay in Greece’s timeline would
require more funds, and that these would have to come from other
Eurozone member states. The Sueddeutsche Zeitung, citing no sources in
its story, said it remained open where the funding would come from to
meet the reported concessions by EMU members.

“If we were to extend the fiscal targets by two years, that would
mean additional financial means must be put in place by the other
Eurozone member states,” Asmussen said.

Asmussen also reiterated that the ECB was clearly acting within its
mandate in launching its OMT bond-buying program and stressed the ECB
still maintains price stability as its “primary goal.” He denied that
the ECB’s actions have – or could – spark higher inflation.

“The data can clearly disarm this [argument]. The money supply
growth is very moderate,” Asmussen said. “Looking forward, inflation
expectations in the entire euro area are firmly anchored around our goal
of 2%.”

Asmussen reiterated that he could understand some of the objections
of fellow ECB Governing Council member and Bundesbank head Jens
Weidmann, but came to a different conclusion.

“I also share many of his arguments, but in weighing all arguments,
in a situation that is new for all of us, come to the decision that
ex-ante unlimited bond buys with conditions is the right path for the
whole of Europe,” Asmussen said.

“We have declared that we will do everything within our mandate to
make the euro irreversible.”

— Frankfurt bureau: +49 69 720 142; email: ccermak@mni-news.com —

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