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Derechos | Equipo Nizkor
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Derechos | Equipo Nizkor
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26Sep12
ECB will not fill Greek budget gap: Weidmann
Bundesbank Chief Jens Weidmann became the second ECB official on Wednesday to pour cold water on a Greek proposal for the European Central Bank to help Athens plug fiscal gaps by holding Greek sovereign bonds beyond their planned maturities.
Financial gaps, Weidmann told reporters, "...are not to be filled by central banks. This is a clear position I have."
The comments from the ECB policymakers, coming one day after the Greek proposal, will make it harder for Greece to go cap in hand to the central bank as Athens endures its fifth year of recession and slips further from its fiscal targets.
Earlier on Wednesday, ECB executive board member Joerg Asmussen shot down the suggestion that the ECB would assist Greece by rolling over its bonds.
Greek Deputy Finance Minister Christos Staikouras said in a document released on Tuesday that Athens could ask the ECB to roll over its Greek bonds to help Athens plug any financing gaps from a budget shortfall or lower than expected privatization revenue.
Speaking in a interview published on Wednesday, Asmussen said with equal force that any possible financing gap in Greece can be filled only by euro zone states, and that the ECB would not participate in any potential debt restructuring.
"The ECB would not be able to take part in any such restructuring, because this would constitute state financing, which is forbidden," Asmussen told German newspaper Die Welt.
A novel ECB bond-buying program unveiled earlier in September has alarmed Europe's monetary conservatives like Weidmann, who fear that the central bank will start printing money to finance state deficits, or fiscal monetization.
Weidmann was the only member of the ECB's Governing Council to oppose the so-called OMTs, or Outright Monetary Transactions, which are contingent upon struggling states like Spain or Italy agreeing to bailout-linked reforms.
No Bailout
Weidmann made his comments after meeting Italian Economy Minister Vittorio Grilli, who had come to Frankfurt to give the Bundesbank chief an update on Italy's reform progress and to discuss the current developments in the euro zone.
"We did not ask for any money," Grilli told reports during a press conference when asked about the purpose of his visit. He said despite Italy's worsening economy and public finance, it had no intention to seek help from the European bailout fund.
"Italy is doing, I believe, a very good job in reforming its economy and without the need for any extra help," Grilli said.
"So at this point, it is not within any plan of the Italian government to apply for any program. We are quite confident we are solving Italian problems within our government mandate."
Weidmann added he believed Italy was strong enough and its economic fundamental sound enough that it did not need a rescue package and that Italy would emerge from the crisis stronger
[Source: Reuters, Frankfurt, 26Sep12]
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