-Adds comments on confidence, rating agencies
FRANKFURT (MNI) – It is “crazy” to question the future of the euro,
European Central Bank Executive Board member Juergen Stark said on
Friday.
“The euro has a future and is the future” for Europe, Stark said in
a panel discussion here. “There is no alternative than the euro for the
European citizen.”
Stark argued that, in fact, this was not a crisis of the euro.
“It is a crisis of sovereign debt,” he said. “It is all too easy to
forget the successful history of the euro,” he said, adding that
inflation has remained anchored in line with the ECB’s definition of
price stability “since the launch of the EMU.”
“Let me say that we should not forget the role of the euro in
particular in monetary integration,” Stark continued. “Promoting
functioning of the market and the single currency has led to further
market and financial integration, to the benefit of all citizens.”
Stark reiterated that this was this was more a crisis of confidence
of government’s ability to run sound fiscal policies, adding that the
confidence issue was “not only a euro area problem”, despite the
markets’ focus on Europe.
“This sentiment is emphasized, in my view, by inappropriate
statements by politicians around the world, and is emphasized by
pro-cyclical behaviour of rating agencies, which in my view, is really
irresponsible,” Stark said.
Expanding on his last point, Stark cited the downgrading of Greek
debt even before negotiations between the Greek government, the ECB and
the IMF had concluded.
“Rating agencies had no idea what the outcome of the negotiation
were, no idea of the financial needs and size of the program,” he said.
“And in this negotiation phase, Greece was downgraded and I think this
was unjustified.”
“For this reason, we decided not to refer to the statements of
rating agencies,” he continued.
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