FRANKFURT (MNI) – Europe must ensure that Greece is seen as an
exception case so as to avert additional contagion, European Central
Bank Governing Council member Yves Mersch said in an interview published
Tuesday.
“It is not about Greece, it is about whether Europe will be able to
treat Greece as an isolated case without its situation spreading to
other countries,” Mersch told Luxembourg’s magazine Revue.
A failure to do so could quickly lead to a more dramatic situation
in Luxembourg and elsewhere, Mersch warned when asked about the possible
impact of Greek debt restructuring.
Mersch, who heads the Luxembourg Central Bank, reminded that the
ECB had publicly rejected the idea of private sector involvement as a
crisis instrument. He also reiterated the central bank’s opposition to
using its balance sheet to leverage the Eurozone bailout fund EFSF.
“To that we say ‘no’,” Mersch declared. “We are dealing with fiscal
problems. Those cannot be solved on the back of the currency. This would
undermine the currency’s credibility,” he warned.
Mersch said that the price stability mandate is “the soul of the
ECB and I cannot imagine that this would be jeopardized.”
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–Frankfurt Bureau tel.: +49-69-720 142, email: jtreeck@marketnews.com
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