FRANKFURT (MNI) – A default by Greece is not the most likely
outcome of the sovereign crisis facing the country, European Central
Bank Executive Board member Juergen Stark said Wednesday.
In a German radio interview, Stark played down the significance of
Greece for the Eurozone, noting that the Greek contribution to the
area’s output was “on an order of magnitude of 2.5%” and that Ireland
and Portugal are also relatively insignificant economies.
“There is no danger that the euro as a currency will be affected”
because of Greece, he asserted. “The euro is a strong currency” and the
ECB is aware of its primary mandate of ensuring price stability in the
area as a whole.
It is not only Greece, Ireland and Portugal that need to implement
fiscal consolidation, he said, calling on all advanced economies to
practice sustainable public finances and noting the need for the U.S. to
do so.
Greece, however, “has to do its homework” and make progress on
privatizing assets currently held by the state, Stark demanded. “Greece
has to fulfill the conditions of the program” of fiscal consolidation
imposed in return for financial assistance.
“Greece has to create the conditions for it to return to the
market,” he said. As long as Greece is adhering to the conditions of its
adjustment program, it can count on help from its partners, Stark said.
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