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ECB Executive: Talk of Grexit Unreasonable and Unrealistic


The speculation of a possible Grexit, which lately dominates the Greek public sphere, ruled out European Central Bank (ECB) executive board member Benoit Coeure in an interview with the Irish Times. Coeure characterized such scenarios as “unreasonable and unrealistic.”

When asked about the ECB officials’ view on Greek main opposition SYRIZA leader Alexis Tsipras and his anti-austerity pre-election proclamations, which according to some critics may lead Greece out of the Eurozone, he replied that such a scenario is unlikely, while noting that ECB’s emergency mechanisms supporting the Greek banks depend on the country’s presence in the European Union/ International Monetary Fund bailout program.

In addition, Coeure underlined that ECB is not a political institution and as such it will cooperate with any Greek government to be formed after the January 25 general elections. He also stressed that the flexibility of a different government having different opinions on the country’s reform program is the essence of democracy.

Finally, the bank executive highlighted that Greece will have to fully comply with the ECB rules and that after its bailout program and its evaluation is complete, it is up to the country to decide whether it proceeds within the program or not.

Coeure’s interview comes only a few days after Greek Finance Minister Gikas Hardouvelis’ position that ECB will not provide the usual liquidity it offers to the Greek banks if the Greek bailout program is not complete. The Greek Minister argued that if the country’s next government collides with the Troika, there is a high risk of Greek banks having to resort to the Bank of Greece’s (BoG) Emergency Liquidity Assistance (ELA), which will definitely cost more. According to Hardouvelis, this additional cost would put further pressure on domestic interest rates for businesses and households alike.

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