AFP - A Greek exit from the eurozone would be "manageable"
even if it would be expensive and result in higher unemployment, a top member of
the European Central Bank was quoted as saying on Monday. In an interview with
the Frankfurter Rundschau, Joerg Asmussen, a German member of the ECB's
Executive Board, was asked about the possibility of debt-wracked Greece being
forced out of the eurozone. "First: My preference is clear. Greece should stay
in the eurozone. Second: It is in Greece's hands to achieve that. Third: A Greek
exit would be manageable. Fourth: An exit would not be as orderly as some
imagine," he said. Such an exit would spark a slump in growth, job losses and
would be "very expensive. In Greece, in Europe and in Germany," said Asmussen.
Asmussen's comments came at the start of a crucial week for Greece as it bids to
persuade its European partners to release a further slice of aid to keep its
economy on life support and enable it to stay in the 17-nation bloc. Prime
Minister Antonis Samaras holds talks with German Chancellor Angela Merkel in
Berlin on Friday and with French President Francois Hollande the day after.
Greek Foreign Minister Dimitris Avramopoulos was in Berlin Monday for a meeting
with his German counterpart Guido Westerwelle to prepare the talks. All eyes are
on a key report from Greece's international creditors, known as the Troika,
expected in September. The report will assess Greece's reform progress demanded
to unlock some 31.5 billion euros ($38.9 billion) desperately needed to keep the
country afloat. On his foreign tour, Samaras is expected to discuss the
possibility of having two more years to achieve the required cuts. Berlin has
until now insisted that Athens must stick to the timeline and reforms agreed in
return for its aid package. But mass circulation Bild reported on Monday that
some concessions could be made to Greece within the agreed timeframe. Steffen
Kampeter, a top finance official, told German radio the decision would be based
not on requests from Athens but on the report of the troika, which comprises the
European Commission, the ECB and the International Monetary Fund. "There will
not be any bilateral decisions on Friday," he said, referring to the meeting
between Merkel and Samaras, "but decisions taken in an ordered, fair and
transparent manner at the European level." In other comments, Asmussen
reiterated the ECB's position that it might buy the bonds of countries with
soaring borrowing costs if they first apply for aid from the EU bailout fund and
submit to tough conditions. He said such a strategy would be "better conceived"
than an earlier, disputed, program known as the Securities Markets Program
(SMP), during which the ECB bought 211.5 billion euros of bonds, a move that
held down borrowing costs. The introduction of the program sparked the
resignation of two German members of the ECB, Juergen Stark and Axel Weber, in
protest at what they saw as an overstepping of the bank's mandate to keep a lid
on inflation.
Access Investments-Building Awareness - European Union-ROMANIA
Thursday, August 23, 2012
AFP - A Greek exit from the eurozone would be "manageable"
even if it would be expensive and result in higher unemployment, a top member of
the European Central Bank was quoted as saying on Monday. In an interview with
the Frankfurter Rundschau, Joerg Asmussen, a German member of the ECB's
Executive Board, was asked about the possibility of debt-wracked Greece being
forced out of the eurozone. "First: My preference is clear. Greece should stay
in the eurozone. Second: It is in Greece's hands to achieve that. Third: A Greek
exit would be manageable. Fourth: An exit would not be as orderly as some
imagine," he said. Such an exit would spark a slump in growth, job losses and
would be "very expensive. In Greece, in Europe and in Germany," said Asmussen.
Asmussen's comments came at the start of a crucial week for Greece as it bids to
persuade its European partners to release a further slice of aid to keep its
economy on life support and enable it to stay in the 17-nation bloc. Prime
Minister Antonis Samaras holds talks with German Chancellor Angela Merkel in
Berlin on Friday and with French President Francois Hollande the day after.
Greek Foreign Minister Dimitris Avramopoulos was in Berlin Monday for a meeting
with his German counterpart Guido Westerwelle to prepare the talks. All eyes are
on a key report from Greece's international creditors, known as the Troika,
expected in September. The report will assess Greece's reform progress demanded
to unlock some 31.5 billion euros ($38.9 billion) desperately needed to keep the
country afloat. On his foreign tour, Samaras is expected to discuss the
possibility of having two more years to achieve the required cuts. Berlin has
until now insisted that Athens must stick to the timeline and reforms agreed in
return for its aid package. But mass circulation Bild reported on Monday that
some concessions could be made to Greece within the agreed timeframe. Steffen
Kampeter, a top finance official, told German radio the decision would be based
not on requests from Athens but on the report of the troika, which comprises the
European Commission, the ECB and the International Monetary Fund. "There will
not be any bilateral decisions on Friday," he said, referring to the meeting
between Merkel and Samaras, "but decisions taken in an ordered, fair and
transparent manner at the European level." In other comments, Asmussen
reiterated the ECB's position that it might buy the bonds of countries with
soaring borrowing costs if they first apply for aid from the EU bailout fund and
submit to tough conditions. He said such a strategy would be "better conceived"
than an earlier, disputed, program known as the Securities Markets Program
(SMP), during which the ECB bought 211.5 billion euros of bonds, a move that
held down borrowing costs. The introduction of the program sparked the
resignation of two German members of the ECB, Juergen Stark and Axel Weber, in
protest at what they saw as an overstepping of the bank's mandate to keep a lid
on inflation.
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Courtesy of the speedy translators at the newswires, we can now add a little more flesh to the bones of what Angela Merkel and Francois Hollande had to say at that press conference ahead of their talks this evening.
The German chancellor said:
It’s important to me that we all stand by our obligations and wait for the troika report and see what the result is. We and I will encourage Greece to pursue the path of reform that demands a lot from the people.
While the French president said:
We want - I want - Greece to be in the euro zone, it's a desire we have expressed since the start of the crisis. It's up to the Greeks to make the effort that is essential for that goal to be met.
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