ECB’s Coeure: Conditionality Not Necessarily More Austerity
PARIS (MNI) – The conditions demanded by the European Central Bank
for intervention in Eurozone sovereign bond markets are not more
austerity per se, but rather a political consensus that the target
countries are on the path toward fiscal consolidation and growth, ECB
Executive Board member Benoit Coeure said Saturday.
“The idea is not to add austerity to austerity,” Coeure explained
in a radio interview. “These countries have already taken many measures
that go in the right direction. There will not necessarily be additional
demands” on governments.
“Before we intervene, we would like a political consensus” among
the Eurozone countries on measures that will be monitored by EU
authorities and “if possible” by the International Monetary Fund, he
said. The conditions imposed on Spain for intervention to lower its
borrowing costs must be decided by its Eurozone partners, he added.
The “technical measures” proposed by ECB President Mario Draghi
will certainly not bring an end to the crisis, Coeure cautioned. “It’s
not up to the European Central Bank to resolve all dimensions of the
crisis.” Nor can the success of the new strategy be measured by the
positive initial reaction of financial markets, he cautioned. “That can
change, you know.”
“In the situation of the Eurozone, the most important thing now is
to have growth policies that create prospects for the integration of
markets and create prospects for an exit from the crisis,” Coeure
stressed, citing the segmentation of capital markets as a problem. A new
mechanism for decision-making at the European level may be necessary, he
“More ambitious growth policies” than the EU growth compact are
certainly possible, he said, proposing greater integration of services
markets and policies to enhance labor mobility. “Why not unemployment
insurance at the European level?”
The time to act is now since growth is likely to be “very weak”
this year and next, Coeure said.
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