Greece cannot have more time to repay its debt to the European Central Bank because it would be illegal and “illogical”, board member Joerg Asmussen has said, as he shut the door on pleas for leniency from the bank.
4:02PM BST 07 Oct 2012
Mr Asmussen said that the ECB could not lengthen the time period for loans to Greece or lower interest rates as “both concessions would be a form of debt forgiveness and therefore a direct financial support for the Greek state.
“That would not be allowed under the law governing the ECB,” he said.
He also said that it would be wrong for Greece to say it needed more time but not more money.
“A temporary extension of fiscal targets automatically means that Greece needs more financial assistance from abroad.” he told German newspaper Bild am Sonntag.
“It is logically quite wrong to say: we need more time, but not more money.”
Mr Asmussen also said that statements by ECB members, including president Mario Draghi to do “everything to defend the euro” had helped to ease market tensions, but warned that the current calm was “deceptive”, and called for all eurozone countries – including Germany and France – to reform.
Last week, Greek prime minister Antonis Samaras repeated his call for “accommodating policy” from the ECB regarding the payment of the country’s debt and interest payments.
“If they could roll them over for instance that would be positive, that would make the funding gap much smaller,” said Mr Samaras.
Greece’s finance minister confirmed on Saturday that there were still disagreements over a fresh austerity package amounting to nearly €13.5bn (£10.9bn) over the next two years.
Following a meeting with “troika” officials from the ECB, International Monetary Fund and European Commission, Yannis Stournaras admitted that there were “deviations” in opinion.
Eurozone finance ministers will gather in Luxembourg on Monday for the inaugural meeting of the Board of Governors of the European Stability Mechanism (ESM), which will replace the European Financial Stability Facility as the eurozone’s permanent bail-out fund.
German Chancellor Angela Merkel will also visit Greece for the first time since the eurozone debt crisis erupted next week, in a show of support for Athens after it said it would run out of money at the end of November without fresh international aid.
“It is a trip that of course happens to the backdrop of this very difficult situation that Greece is going through right now, the massive adjustment and reform measures that have shaped Greece for the past two years,” a spokesman said.
Alexis Tsipras, leader of the opposition Syriza party, accused the German Chancellor of “coming to Athens to save the corrupt, disgraced and servile political system.
“We will give her the welcome she deserves,” he added