Tags: euro | ecb | almunia | crisis

EU Official: ECB Must Do More to Boost Markets

Monday, 28 Nov 2011 05:46 PM

The European Central Bank needs to take a “further step” to help restore investor confidence in the euro area, Joaquin Almunia, the European Union’s competition commissioner, said.

“Growth doesn’t just come from the liquidity given to the banks -- we need to resolve the problem of confidence in the public debt of the countries in the euro zone,” Almunia said in an interview with the broadcaster Television Espanola Monday. “That’s where we are asking the ECB to take a further step.”

As European finance chiefs prepare to meet this week, economists from banks including Morgan Stanley and UBS AG have called on governments and the ECB to step up their response to Europe’s debt crisis. Moody’s Investors Service said Monday the “rapid escalation” of the crisis threatens all of the region’s sovereign ratings.

“If euro bonds are still not on the table and the financial facility or the instruments for financing or financial support for the countries are still not working as was thought, the last recourse that we have is that the ECB be more active,” said Almunia. The ECB “must contribute” if the governments aren’t capable of adopting solutions, he said.

Almunia, who was EU economy commissioner before his current post, said investors no longer see German government debt as a risk-free security. He also told TVE he didn’t believe that Germany and France are preparing a currency “club restricted for a few people.”

In reference to Greece, Almunia said the government there had said it only had liquidity to last “days.” “This cannot be resolved in March or July of next year, it has to be resolved in coming days” to avoid further problems for Ireland and Portugal, he said.

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The European Central Bank needs to take a further step to help restore investor confidence in the euro area, Joaquin Almunia, the European Union s competition commissioner, said. Growth doesn t just come from the liquidity given to the banks -- we need to resolve the...
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2011-46-28
Monday, 28 Nov 2011 05:46 PM
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