HELSINKI (MNI) – European authorities must put a fence around
Greece and ensure that the crisis there does not infect the rest of the
Eurozone, European Central Bank Governing Council member Erkki Liikanen
said Monday.
“It is important that we contain the European crisis to Greece,”
said Liikanen, who heads the Bank of Finland. He added: “As long as
Greece fulfills its IMF-EMU debt package conditions, we will support
it.”
Answering questions from the audience after presenting the Bank of
Finland’s economic outlook, Liikanen noted that Ireland is getting
“positive marks” for the reforms it is implementing, while Italy and
Spain are being “followed carefully.”
In a written statement issued before Liikanen spoke, the Bank of
Finland warned that, “the sovereign debt crisis is no longer only the
problem of some small countries but a euro area-wide crisis that has
taken on systemic dimensions.” It added: “Measures taken by a troubled
country no longer suffice to remedy the situation; a broad-based common
commitment is required.”
Liikanen told the audience that further deterioration of the crisis
“can be prevented, but every nation has to do its part.” He warned: “If
the [situation] breaks down, it will hit us hard.”
He also noted the recent change of view by the ECB, which now sees
risks to growth on the downside and inflation risks balanced. But this
does not necessarily mean the central bank’s next monetary policy move
will be a rate cut, he suggested.
“We don’t precommit to future actions,” he said. “Monetary policy
decisions are taken in the meetings based on current data.”
More
[TOPICS: M$$EC$$,M$X$$$,MT$$$$,MGX$$$,M$$CR$,M$Y$$$]
