16 July 2018

Up to the government in Athens to stabilize the Greek economy

22 May 15 | Jens Weidmann
Jens Weidmann



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Solum Property Solutions

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Eurobank Property Services

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Dimitris Andritsos

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Greece's European partners cannot simply buy it more time to calm financial markets and it is up to the government in Athens to stabilize the Greek economy, Bundesbank chief Jens Weidmann has told Reuters.


Greek Prime Minister Alexis Tsipras's leftist government says it hopes to reach a cash-for-reforms deal in days, although European Union and International Monetary Fund lenders are more pessimistic and say talks are moving too slowly for that.

Asked about calls from beyond Europe for other EU countries to help Greece and calm financial markets, Weidmann said: "This can't always simply be about simply buying Greece more time."

"The prospect of a sustainable stabilization of Greece is decisive," Weidmann told Reuters in written responses to questions ahead of next week's meeting of finance ministers and central bank chiefs from the Group of Seven industrial nations in Dresden, Germany.

"That requires an improvement in competitiveness, solid state finances and better administrative structures. The IMF has also rightly advised this. Hence, the ball is clearly in the court of the Greek government."

Greece expects to reach a cash-for-reforms deal with its creditors in the next 10 days and aims to meet all its payments in June, the government's spokesman said on Friday, after the prime minister met with European Union leaders.

Turning to recent volatility in some financial markets, including a rise in yields for German Bunds, Weidmann said this marked a correction of exaggerations.

"A departure from these unusually low volatility levels can help to sharpen again the awareness on financial markets of risks."

On the European Central Bank's monetary policy, Weidmann said his scepticism about the ECB's money printing -- so-called quantitative easing (QE) -- was known, but added:

"With regard to the credibility of the ECB Governing Council, it seems to me it would be of little help if this decision that has been taken were constantly questioned."


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