VIENNA (MNI) – Now is not the moment to discuss a potential exit of
Greece from the Eurozone, European Central Bank Governing Council member
Ewald Nowotny said Thursday.

At a press briefing on the margins of a conference of the Austrian
National Bank, which he heads, Nowotny, who admitted that he was
“naturally” worried about Greece, said that “this is a premature
discussion. What we have to discuss now and what we have to concentrate
on is to solve this situation as we see now, and the key to solving this
lies with the Greek government and political system.”

However, he added, “we do not have an infinite amount of time, time
is flying because of financing needs.”

Pressed on whether the ECB had a “Plan B” for Greece, Nowotny said
he wouldn’t admit it if there were one: “I think this is not a matter to
discuss, with all due respect, at the present time.”

“One has to concentrate on the situation … and observe further
developments in Greece,” he insisted.

The problem in Greece at present is mainly one “of political will,”
he said, and “without this political will or the ability to display it,
it will be very difficult to take measures.”

As to the outlook for growth in Europe, updated forecasts for which
will be released by the ECB next month, “there might be a need for a
downward revision for some countries of the South,” Nowotny said. “And
there is a hope for an upward revision for some countries of, let’s say,
West and Northwest, including Austria.”

It is important in any case not to “have too much of a short-term
view,” but rather to realize that “it takes time to overcome” the
problems being confronted.

Monetary policy is doing what it should and the euro reflects this
by fulfilling its functions correctly, Nowotny said. “It is fully
accepted” as a currency “and it is also serving as a store of value.”

Inflation expectations are “well anchored,” he added.

The problem is thus not the common currency per se, but rather some
countries that use it, he said.

The ECB never pre-commits, he reiterated.

In other comments, Nowotny urged again that a “lost generation” as
a result of high youth unemployment be avoided.

Frankfurt bureau tel.: +49-69-720142. Email: dbarwick@marketnews.com

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