BRUSSELS (MNI) – Financial support to Greece should be tied to
stringent conditions, and the rules of the stability and Growth Pact
must be enforced more aggressively in the future, European Central Bank
President Jean-Claude Trichet said on Monday.
Pointing to a previous statement from heads of government, Trichet
said the Eurozone should only step in if needed to stabilize the
monetary union as a whole.
“We should not mix up a transfer or a subsidy with a
non-concessional loan such as those granted by the IMF,” Trichet said.
“I think we can only be talking about a loan without any subsidy
element. That needs to be extremely clear…That loan is the only
possibility in our view.”
“If strong conditionality would be imposed, if this would be a
purely non-concessional instrument, if it would correspond to an
immediate and grave threat for the country in question and if it would
have an impact on the euro area as a whole,” aid could be considered,
Trichet said.
But there must be a “serious and immediate problem” and it must be
a “problem for the whole Eurozone,” he said. “Those are the conditions
that the ECB sees for such support,” Trichet added, citing “stringent
conditions” and an “encompassing element of stabilization of the
Eurozone.”
The central bank’s president said, “I share your view that …the
[EU's Stability and Growth Pact] needs to be applied rigorously,”
Trichet said.
In particular, he called for more peer pressure to ensure fiscal
discipline.
Trichet dismissed concerns that the 16-nation zone could split up.
“The euro area is not a la carte. We enter into the euro area to
share a destiny in common,” he said. “I said I consider it absurd the
hypothesis of leaving the Euro area.”
–Frankfurt bureau. Tel: +49-69-720-142. Email: frankfurt@marketnews.com
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