–S&P Economist: EU Aid Plan Gives Greece, Spain Breathing Space
LONDON (MNI) – Jean-Michel Six, Standard & Poor’s chief European
economist, gave a ringing endorsement to the Europe Union’s emergency
aid package, saying it offered not just a short but a long term
solution.
EU finance ministers have sanctioned E500 billion of emergency
measures, backed up by additional International Monetary Fund financing,
to try and prevent contagion from the Greek debt crisis. In a Bloomberg
TV interview, Six said it gave Greece and Spain breathing space, and
addressed longer term liquidity issues.
“I think it is a very impressive plan,” Six said.
He added that “for some weeks Europe had been severely criticized
by the market for being late in its response, and that was true. I think
now we have a very comprehensive plan that takes into account all the
criticisms that were formerly expressed.”
Six said the EU plan “provides those countries (vulnerable to
contagion) with a significant breathing space.”
“It should have a long term impact, not just a few weeks,” Six
added.
Six highlighted the multi-faceted nature of the EU aid package.
He said it “takes us to the next step in terms of solving this very
significant crisis.”
Six said the plan addresses bank liquidity and “also takes care of
the need for borrowing dollars that was becoming a bit of a problem for
some banks through the swap agreements that were concluded with the
Federal Reserve.”
The aid plan “is not just a one shot. This is a plan that is taking
care of longer term issues as well as short term issues.
“Greece and then Spain etc. were becoming very focused, very
bothered by what was happening on the financial markets. Now, with that
plan, it provides them with a breathing space to go back and address the
domestic issues that are so pressing,” he said.
He concluded there was no reason to expect any country to leave the
eurozone at this stage.
–London newsroom: 004420 7862 7491 e-mail:drobinson@marketnews.com
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