ECB Paramo: Greek Contagion Eroding Core’s Credit-Worthiness

FRANKFURT (MNI) – ECB Executive Board member Jose Manuel
Gonzalez-Paramo said Friday that contagion from the Greek debt crisis
had now spread to the core of Europe and was even eroding the
credit-worthiness of Germany.

In the text of a speech delivered in London, Paramo said: “There is
a growing body of evidence which shows that contagion plays an important
role in the current crisis gripping the euro area across sovereigns,
across banks, and between the two.”

Paramo said the spillover from the Greek sovereign debt crisis
explained the sharp deterioration in the perceived credit-worthiness of
the other countries under EU/IMF programmes.

“Since July, this applies also to some of the larger euro area
countries such as Italy and even Germany,” he said.

“The spillovers from Greece are persistent and are thus likely to
dissipate only slowly in the presence of favourable developments,” he
warned.

–Frankfurt Bureau +49 69 720 142; email: frankfurt@marketnews.com–

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