FRANKFURT (MNI) – There will be no monetization of public debt in
the Eurozone, European Central Bank Executive Board member Juergen Stark
and Governing Council member Yves Mersch said Wednesday.
“Europe has learned its lesson from the past: under no
circumstances will there be monetization of government debt in the euro
area,” Stark said in a contribution to the quarterly magazine
International Economy.
In the same edition, Mersch said, “Amid the rules of the treaty,
the clear mandate of the ECB, and its institutional independence, the
monetization of public debt in the euro area is out of question.”
Earlier Wednesday, Governing Council member Jens Weidmann said that
the ECB would no longer accept Greek bonds as collateral in its refi
operations should maturities be extended, as “this would ultimately
amount to a monetization of government debt.”
Weidmann dismissed speculation that the ECB is just bluffing with
the threat of cutting Greek banks off of the central bank’s liquidity
provision in case of restructuring.
Stark also said “the ECB will do all that is necessary to keep
inflation expectations in the euro area firmly anchored in line with our
price stability definition. ”
“The monetary policy stance will be adjusted as necessary and the
non-standard monetary policy measures adopted during the crisis
discontinued as the need for these measures vanishes,” Stark said.
–Frankfurt newsroom +49 69 72 01 42; e-mail:jtreeck@marketnews.com
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