FRANKFURT (MNI) – The risk of a member state insolvency will not be
included in the scenarios covered by the EU’s bank stress tests,
France’s Finance Minister Christine Lagarde said in a newspaper
interview published Friday.
“For me it is excluded even to consider such a hypothesis,” Lagarde
told the German business daily Handelsblatt. “However, we are testing
[for] the risk of a strong decline in the value of government bonds.”
Lagarde also said it was too soon to talk about a successor to
European Central Bank President Jean-Claude Trichet’s successor, but
that there could be two or three candidates.
The question of whether France would be in favor of Bundesbank
President Axel Weber’s to succeed Trichet is not relevant at the moment,
she said.
As to whether a German in general could be the next head of the
ECB, “why not”? Lagarde asked rhetorically. “But there will be perhaps
two or three candidates. It is a little early to say for whom France
will decide. I don’t find it very sensible either to talk now constantly
about the successor to Monsieur Trichet.”
Such talk could make a “lame duck” of Trichet at a time the
financial markets “are still tense,” she argued.
Lagarde promised that France would “resolutely” continue to pursue
fiscal consolidation, and she asserted that the country “definitely”
retains room to maneuver on the expenditure side.
–Frankfurt bureau tel.: +49-69-720142. Email: dbarwick@marketnews.com
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