VIENNA (MNI) – A state that has a high level of indebtedness is no
longer a sovereign state, European Central Bank Governing Council member
Ewald Nowotny said late Thursday.
Speaking at a panel discussion on “Leadership in Europe” in the
capital of Austria, whose national central bank he heads, Nowotny quoted
former Swedish Prime Minister Goeran Persson in saying, “A state with
high debt is not a sovereign state” because it is at the mercy of
creditors and rating agencies.
Thus seen, the austerity programs undertaken in the European
periphery “are about regaining the ability to act as a sovereign,” he
reasoned.
Nowotny praised the measures of the ECB in providing liquidity:
“The ECB functions well because it is not a very democratic
institution,” he said. While the ECB speaks with one voice for Europe,
“there is no counterpart to talk to, like a Eurozone finance minister,”
he said. The fiscal compact would deal with this “deficiency.”
In other comments, Nowotny noted the increasing realization that
politics has limited room to maneuver and that “public debt is seen much
more sceptically, also from a political perspective.”
–Frankfurt bureau tel.: +49-69-720142. Email: frankfurt@marketnews.com
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