UPDATE 1-ECB says can't bail out Greece, sees contagion risk
* ECB has clear no-bailout rule - Nowotny
* Contagion is risk, should act against hedge funds -Nowotny
* Countries must get grip on debt themselves -Liikanen
(Wraps Nowotny, Liikanen remarks)
By Boris Groendahl and Terhi Kinnunen
VIENNA/HELSINKI, Feb 9 (Reuters) - Greece must get its own house in order itself as the European Central Bank cannot bail it out, two ECB policymakers reiterated on Tuesday.
"Greece, being a euro country, is under the regime of euro regulations, and so the main policy approach is of course that they have to solve the problems themselves," ECB Governing Council member Ewald Nowotny said in an interview.
"The ECB have a clear mandate ... we have a clear no-bailout clause," Nowotny said in an interview with FT Alphaville, a blog published by the Financial Times newspaper.
Fellow Governing Council member Erkki Liikanen told Finnish broadcaster YLE: "We wait and trust that Greece will carry out those actions it announced last week."
"It is very important that we follow the stability pact guidelines and that all countries get their debt under control. Otherwise rates will rise and it will make paying back debt more difficult," Liikanen said.
Nowotny added that speculation driven by hedge funds played a role in the slump of Greek and other peripheral euro zone debt, and that there should be efforts to curb those actions.
"There is, no doubt, a lot of speculation around," Nowotny said. "So I heard yesterday, around here in London, talking with the bankers, it became quite obvious that hedge funds do play a role and this is something that I think one has to take seriously; and try to take some action against it."
The risk that Greece's troubles spill over to other euro zone countries such as Spain or Portugal also needed to be taken seriously, even though it was not based on economic fundamentals, Nowotny said.
"Of course contagion is something that has to be taken seriously. But I think it is not founded in economic reality For instance the Greek debt situation is quite substantially different from the one in Portugal and Spain. The situation in Portugal and Spain is much better compared to Greece."
Euro zone assets recovered some poise on Tuesday as markets bet the European Union would take steps to restore confidence in struggling members like Greece at a summit this week. [ID:nSGE61801C]
While reiterating the ECB's stance that there would be no Greek bailout, Nowotny said that for the EU and its members help would be a political decision.
"So the ECB as such cannot intervene. Whether there are some interventions from the side of individual countries, let's say bilateral or some kind of concerted action, this is a political decision," he said. "But it's not, with regards to the ECB."
Nowotny mentioned the EU's structural funds as a policy tool that could be used to help Greece. (Reporting by Boris Groendahl; editing by Ron Askew)
- Tweet this
- Share this
- Digg this