FRANKFURT (MNI) – Eurozone governments have expressed their
commitment to the common currency and this commitment is credible,
European Central Bank Governing Council member Axel Weber said Thursday.
The Bundesbank head said that he is confident that support packages
extended by the EU and the International Monetary Fund to Ireland and
Greece will help lastingly improve the situation.
“European governments have repeatedly made clear that they are
committed to the common currency and I am convinced that this is a
credible commitment,” Weber said. He said action must now be taken to
ensure this commitment will be honored.
The European Central Bank earlier Thursday did its part to try to
calm the market tensions that have called the viability of the Eurozone
into question. The central bank maintained all its non-standard measures
and reportedly significantly stepped up government bond buys yet again.
Weber also said that he expects the Irish bailout package that has
been received unexpectedly poorly “will result in a turnaround of macro-
economic indicators” in the country.
“I am convinced .. that when programmes [in Ireland and Greece] are
carried through, they will contribute to a sustained improvement of the
situation,” Weber said.
Asked about the German banking sector’s exposure to Eurozone
peripheral countries’ debt, Weber said that figures reported by
international organizations like the Bank of International Settlements
may exaggerate debt held by German banks.
Out of an E138 billion reported exposure to Ireland, only some E25
billion had constituted exposure to Irish sovereign debt, Weber offered
by way of example.
–Frankfurt bureau; +49-69-720142, frankfurt@marketnews.com
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