FRANKFURT (MNI) – Bank recapitalization must be part of a larger
comprehensive package, German Deputy Finance Minister Joerg Asmussen
said Monday in a European parliamentary hearing aimed at clearing his
nomination to join the European Central Bank’s Executive Board.
“I would be in favor of bank recapitalization as part of a broader
package, not as an isolated instrument,” Asmussen said. “Isolated
measures don’t help, we need a comprehensive package.”
This package must also include “a credible solution for Greece” and
effective firewalls protecting other Eurozone countries by enhancing the
EFSF instruments and making the most efficient use of its firepower,
Asmussen said.
Apart from the additional fiscal consolidation and economic
reforms, “banking recapitalization and ensuring access to funding,
especially short-term funding”, must also be part of this package.” This
should be done on the EU 27 level to avoid a “stigma effect,” Asmussen
said.
On Greece, Asmussen said he was not in a position to confirm
reports that Germany is demanding a larger Greek haircut, as the Troika
was still in Greece. Once the Troika report is ready, “we need to look
at what needs to be done to come up with a sustainable solution for the
country concerned,” Asmussen said. He said later with respect to the
Troika that “I do think we need to be more strict” towards Greece.
Asmussen also said that “we do not have a euro crisis, it is simply
not true. We have a strong and stable currency.” He observed that the
European Central Bank appeared to have been the only institution able
“to act quickly and decisively” during the crisis. Economic governance
in the Eurozone must be improved, he demanded.
— Frankfurt newsroom: +49-69-720142; email: frankfurt@marketnews.com
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