BERLIN (MNI) – European Central Bank Executive Board member Lorenzo
Bini Smaghi said in a newspaper interview published Sunday that he is
confident Italy will stick to its budget consolidation course even after
the elections in 2013.
“I’m confident,” Bini Smaghi, an Italian national, told German
weekly Welt am Sonntag (WamS). “The budget plans bind future
governments. Moreover, the opposition is supporting the goals of the
programs,” he said.
Still, the central banker pointed out that the recent market
tension with regard to Italy’s fiscal situation has shown how high the
contagion risks in the Eurozone are.
Bini Smaghi said the new bailout package for Greece, announced last
Thursday by EMU leaders, does not mean the Eurozone is turning into a
transfer union
“Surely, given the difficulty of the situation, a good compromise
was found,” Bini Smaghi was quoted as saying. “But we should not act as
if this agreement was free of charge.”
The agreement must remain an isolated case, Bini Smaghi urged.
“Ireland and Portugal have affirmed their determination to implement
their [budget cutting] programs and they are on course,” he said.
“We must prevent false incentives and also avoid the impression
that restructuring is an easy exit,” he said. He argued that countries
should not be rewarded for breaching the rules of the EU Stability and
Growth Pact.
Bini Smaghi also lamented that the debate about a possible
restructuring of Greek debt had destabilized financial markets.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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