SEVILLE, Spain (MNI) – Growth in Europe is stabilizing at a low
level and this is a positive development, but the situation is not yet
robust, European Central Bank Executive Board member Jose Manuel
Gonzalez-Paramo said Thursday.
Speaking to journalists prior to giving a speech here, Paramo said,
“the growth of the Eurozone in its totality is stabilizing at low
levels, but there is a certain stabilization, which is a good sign.”
However, he added, “the situation remains fragile.”
Asked about comments reported recently to the effect that Spain was
not far from default, Paramo responded, “I believe that to play with
this terminology is very, very serious. No one should use the term
default frivolously.
“Spain is a country whose public debt is low compared with the
average of the European Union,” he continued. “It is reforming its labor
market and its financial system and it is about to present a budget in
Parliament whose objective, agreed with the Union, is 5.3% [deficit as a
percentage of GDP] for the year 2012 and 3% for the coming year. I think
that these circumstances mean that to speak of extreme scenarios is
devoid of any sense.”
As to whether a third three-year long-term refinancing operation
could prove necessary, Paramo noted that the two already conducted were
“very important” and “had very clear justifications.”
But “now is the governments’ turn,” he stressed. “The governments
are the ones who have to act” with respect, for example, to establishing
an appropriate firewall.
Paramo reiterated the idea that “Greece is a unique case” and noted
the “very positive” assessment by the so-called Troika of Portuguese
efforts to deal with its fiscal problems.
Email: dbarwick@marketnews.com
** MNI Frankfurt Bureau Tel: +49 69 720142 **
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