BRUSSELS (MNI) – Speculators positioning themselves to profit from
a possible Greek default are sure to lose money after the measures
agreed on last week by Eurozone leaders, European Central Bank President
Jean-Claude Trichet said in an interview with French magazine Le Point,
released on Wednesday.
“Such a speculation would be a sure-fire way of losing money given
the decisions taken last Thursday,” Trichet said.
At the emergency summit in Brussels last week, the 17 leaders of
the Eurozone, along with the ECB and the International Monetary Fund,
pledged E109 billion euros to help reduce Greece’s debt problems and
agreed the broad outlines of a plan to involve private investors in a
restructuring of Greece’s debt, through bond swaps, rollovers and debt
buy backs.
New flexibility for the EU’s emergency bailout fund, the European
Financial Stability Facility, was also agreed.
“The proposals from the private sector and the decisions of the
European governments, i.e. lowering interest rates and extending the
duration of the loans, will ease Greece’s debt service burden
considerably. Furthermore, the outstanding debt will decrease through
bond swaps and debt buybacks,” the ECB chief said.
“But what is important is that Greece carries out the adjustment
itself, helped by this very important decrease of the yearly service of
the debt,” Trichet added.
Greece, he said, “needs to return to a path of sound governance as
quickly as possible, i.e. it needs to restore its budget to health,
implement a rigorous privatisation programme and carry out essential
structural reforms,” the ECB President said.
Trichet rejected suggestions that the EU was simply bailing out
Greece. “The Europeans are not subsidising Greece to never see their
money again. They are investing in its recovery. Of course, they need to
monitor their investment closely,” he said.
“Greece is committed to doing everything, and will do
everything — under the strict surveillance of Europe, which is
something we have always called for — to restore confidence, regain
stability and pay back its loans from Europe,” he stressed.
Trichet also dismissed the idea that Greece and other
heavily-indebted EU governments were a risk to the stability of the
common currency.
“The pressure observed on sovereign risks is not solely a European
problem, it is also a global problem. The United States and Japan also
have major fiscal problems,” he said.
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