FRANKFURT (MNI) – Providing fiscally embattled Greece with
financial assistance is the best way to prevent the crisis from
spreading, European Central Bank Governing Council member Axel Weber
said in an interview published Thursday.
The head of the Bundesbank was quoted in German daily Bild as
saying, “Let me say it clearly: Aid for Greece is as a last resort
currently the best means in my view of preventing a crisis from
spreading to other member states and the Eurozone with considerable
negative consequences.”
“Stopgap assistance” should be granted Greece under “tough”
conditions, Weber said. If Greece fulfills the conditions and implements
reforms consistently, it can make it, he said.
German citizens can be sure that “strong European and national
institutions” will ensure the stability of the euro, he promised.
A “central lesson” of the crisis is the indispensability of sound
public finances, Weber said, urging that the budgetary rules of EU be
“distinctly” sharpened.
Expelling Greece from the Eurozone is legally impossible and the
consequences would include “enormous economic and financial
distortions,” he said.
“A tough restructuring of the country is, to be sure, certainly not
simple, but in any case more agreeable than an exit from monetary
union,” he said. “However, it is also clear that monetary union is no
transfer union and Greece itself is called upon.”
Letting Greece simply go bankrupt would have “incalculable”
ramifications at the moment for financial markets and other countries,
Weber said. Aid, “linked to tough conditions,” is therefore the “clearly
better” option for all.
Asked how great the risk is that the Greek crisis could throttle
the economic recovery, Weber replied that precisely because the upturn
could be endangered, “we have to act quickly now” to restore calm to
markets.
–Frankfurt bureau tel.: +49-69-720142. Email: dbarwick@marketnews.com
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