Draghi: Greece Must Implement Reforms

Greece has a chance to escape its current “downward spiral” if it implements the “important reforms” that its Parliament has approved, Mario Draghi, the president of the European Central Bank, told German newspaper Bild-Zeitung in an interview published Friday.
“In order for Greece to overcome the crisis, it needs stable political conditions,” Draghi said to the newspaper, Dow Jones reported.
He said many of the reforms in Greece, such as tax reform and tax collection to more justly distribute the burden, can have a quick effect in bringing the economy back.
Draghi said Greece would face even more trouble were it on its own and with its own currency, with high inflation and instability and no one to come to its financial rescue.
The central banker said the Greeks will have to accept a lower standard of living, and they are doing so with wage cuts in all sectors.
Draghi said it remains to be seen how it goes in Greece, but he added that the euro zone has to avoid becoming a “transfer zone” in which one or two countries pick up the bill for others΄ expenses and the entire zone gets financed with euro bonds.
Euro-zone governments have to build confidence in their fiscal integrity, and that΄s why the new fiscal pact with common rules is correct, he said. “Therefore, it would be too early for euro bonds,” he told the newspaper.
(source: Bild-Zeitung, Dow Jones)