Greece's sovereign debt crisis will prove unique in the euro zone and will not spread to other countries, European Central Bank president Jean-Claude Trichet said in a newspaper interview on Friday.
Speaking the day after eurozone leaders agreed a second bailout package for the heavily indebted Mediterranean country, Trichet insisted that other countries like Italy would take appropriate measures to ensure market confidence in their debt.
'I have confidence that all countries in the euro area will not only rigorously keep their present commitments, but will be 'ahead of the curve' and take appropriate measures, as is the case for Italy,' he told Germany's Sueddeutsche Zeitung.
Asked if euro zone countries were throwing good money after bad by propping up Greece's public finances, Trichet said that 'scrupulous' implementation of structural reform in Greece, alongside international technical assistance, was essential.
He also repeated calls he made earlier this month for a euro zone finance ministry with powers to impose structural reform on recalcitrant national governments.
'Tomorrow it should be possible to impose measures on a country that does not implement the agreed adjustments,' he said. 'And as for the day after tomorrow ... I think that the Europeans will invent a new type of confederation which ... would have, naturally, a European finance ministry with its own responsibilities.'
Earlier on Friday, Bundesbank President Jens Weidmann said that the Greek bailout had already weakened incentives for euro zone countries to maintain solid finances and led toward a fiscal transfer union.
Trichet did not go this far, and denied that there was any crisis of confidence in the euro as a currency, pointing to the ECB's anti-inflation track record.
'The euro is a solid, strong and credible currency. We do not have a currency crisis because the euro is stable and keeps its value extremely well,' he said.
Soruce : New Age
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