FRANKFURT (MNI) – Greece will only receive further financial
assistance if it strictly implements austerity measures, European
Central Bank Executive Board member Juergen Stark said in an interview
with German daily Die Welt on Tuesday.

The ECB’s chief economist, who recently warned that this is “the
last chance” for Greece, said comments from Athens suggesting that
reform efforts may be eased after the current program had caused
irritation among EU officials.

“There is only this Plan A. Greece must implement the austerity
program, the parliament will vote on further saving measures over the
next few days,” Stark said.

Should Greece fail to implement spending cuts and privatization
plans, “I do not expect the international community to finance Greece
beyond July,” Stark said.

Despite some unhelpful comments from Athens “there is no reason to
doubt the will of parliament to implement the austerity program,” he
said.

Stark was referring to comments from Greek finance minister
Evangelos Venizelos, who suggested that the country may be able to ease
efforts once the current program has been implemented.

“I do not know what motivated these comments, but in any case they
caused irritations and it is clear that they do not reinforce trust in
Greece,” Stark said.

However, despite Stark’s insistence that there is only a “plan A,”
European officials are reportedly preparing a plan B, in case the Greek
parliament refuses to pass the new austerity measures.

“Be sure, we’re working on it, we’re not only thinking about it,”
an EU official told Agence France Presse. “The next step is not a
default of Greece,” the official added.

Other officials have publicly conceded that they must be ready to
act in case Greece does not approve the measures.

Germany’s Deputy Finance Minister Joerg Asmussen said Monday that
while a rejection of the measures by Greek parliament was not the most
likely outcome, “the eurozone and its financial sectors need to make
preparations.”

And Finance Minister Wolfgang Schaeuble, in a newspaper interview
published over the weekend, said that if Greece rejected the measures,
“we would then have to take care quickly so that the risk of contagion
for the financial system and other Eurozone states will be contained.”

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–Frankfurt bureau tel.: +49-69-720142. Email: jtreeck@marketnews.com

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