PARIS (MNI) – The market reaction to the EU’s support plan for
Greece shows that the risks of contagion to other Eurozone countries
with high deficits and debt have diminished, ECB Executive Board member
Lorenzo Bini Smaghi said in comments to Reuters published Friday.
“I think that the reaction of markets [shows] that the risks have
decreased,” Bini Smaghi said on the sidelines of a conference in
Cernobbio, Italy.
“Governments are already taking action to improve budget positions
to avoid getting into a Greek situation,” he observed.
EU leaders meeting in Brussels also gave a mandate to the European
Commission and the ECB to propose improvements in the Stability Pact.
One improvement might be “that countries don’t diverge in
competitiveness,” Bini Smaghi suggested. “We have to make sure that not
just fiscal policy but all parts of the economies are consistent with
being a member of a single currency.”
[TOPICS: MGX$$$,MT$$$$,M$$CR$,M$X$$$,M$G$$$,M$F$$$]
