FRANKFURT (MNI) – A default by Greece or an exit from the Eurozone
would lead to considerable turbulence in financial markets, Rudolf
Boehmler, member of the board of the German Bundesbank, said in an
interview released Wednesday.
Boehmler told German daily Die Welt that “the reforms are coming
along in Ireland” and that “in Portugal I also see progress.”
“The largest question marks are in Greece,” he continued. “The
country has repeatedly missed the envisaged consolidation and reform
targets in the past, and we must wait and see whether a new, credible
program is agreed.”
Asked whether it would be better if Greece simply withdrew from the
Eurozone, Boehmler replied, “An uncontrolled default of Greece or an
actual withdrawal would bring with it great dislocations on the
financial markets.”
“Such a political decision would result in massive adjustments for
Greece itself and could be much, much more expensive for the other euro
countries then the path presently taken,” he added. “However, I would
like to stress that money alone will not help the countries in crisis
permanently. There is no way around structural reforms, regaining
confidence in solid public finances and stricter budget rules.”
The Bundesbank is “firmly convinced” that the euro will outlast the
current crisis, Boehmler affirmed.
–Frankfurt bureau tel.: +49-69-720142. Email: dbarwick@marketnews.com
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