FRANKFURT (MNI) – The new bailout plan for Greece is putting
additional risks on taxpayers elsewhere in the Eurozone and is weakening
incentives for sound fiscal policies, European Central Bank Governing
Council member Jens Weidann warned Friday.
The Eurozone has taken “a large step towards the collectivization
of risks in case of unsound public finances and undesirable economic
developments,” Weidmann said in a statement.
“This is weakening the basis for a currency union built on the
principle of independent fiscal responsibilities. In the future, it will
be even more difficult to maintain the incentives for solid financial
policies,” he warned.
This makes it all the more important to address the causes of the
currency crisis decisively, he said.
“The adjustment programmes must be followed through,” he said. For
the Eurozone as a whole, there must be no compromises on consolidation
of deficits and strengthening of the currency union’s rule book,
Weidmann asserted.
On a more optimistic note, he observed that decisions made in
Brussels yesterday may help ease financial market tensions, and he
welcomed governments’ assurances of recapitalizing Greek banks and
providing sufficient collateral for them to obtain liquidity from the
ECB.
–Frankfurt bureau tel.: +49-69-720-142. Email: jtreeck@marketnews.com
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