BASEL, Switzerland (MNI) – A sovereign default by Greece would
create chaos, European Central Bank Governing Council member Yves Mersch
said over the weekend.

Asked by journalists on the margins of the Annual General Meeting
of the Bank for International Settlements what would happen if Greece
defaulted, the head of Luxembourg’s central bank replied, “there is
chaos.”

Speaking more generally on the European response to the sovereign
crisis, Mersch complained that “too many conflicting interests” were
providing input into the decision-making process in an EU of 27 states.

“If each country says, ‘My parliament asks us to do this,’ the
other country says, ‘My parliament asks us to do this,’ then inside the
parliament it is a local constituency that says, ‘My constituency says
we must do this,’ this does not create a very conducive environment for
common decision-making,” Mersch said. “The solution is leadership.”

Mersch called on all parties involved in the Greek financial drama
to fulfill their individual responsibilities. “Now it’s up to the Greek
parliament,” he added.

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

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