LONDON (MNI) – The E440 billion European Financial Stability
Facility is enough to prevent speculative attacks on the euro for the
time being, according to Luxembourg’s Finance Minister Luc Frieden.
“I think it is enough for the time being because we have shown that
we are determined to support the euro as a currency and the member
states of the euro area,” he told Bloomberg in an interview.
Frieden said he disagreed with S&P’s Managing Director Moritz
Kraemer’s comments earlier today that there is a ‘14%’ chance that
Greece will default on its debt.
“Greece will not default because they are being closely monitored
by all euro zone states. Greece is doing the right thing,” he said.
Frieden also said that austerity packages in Europe are needed to
shrink deficits and cut debt in order to safeguard the continent’s
long-term prosperity, despite US concerns about severe fiscal
consolidation restricting growth.
“If we don’t do that in the short-term we might have some positive
aspects, but in the long-term Europe will have no future,” Frieden said.
“We think the right time has come to decrease budget deficits and
decrease debt, if we don’t do that I think that in the long-term the
euro area won’t be competitive any more and therefore a huge problem for
all EU economies… that’s why there’s no alternative to fiscal
consolidation,” he said.
Frieden also said he supported calls for greater fiscal and
budgetary coordination within the euro zone.
–London Bureau; Tel: +442078627492; email: ukeditorial@marketnews.com
–William Wilkes of NTKN also contributed to this report
[TOPICS: MT$$$$,MFX$$$,MFXBO$,MGX$$$,M$X$$$,M$$EC$]
