ECB aid mustn't let euro zone indebted off hook: Fetker

Thu Aug 30, 2012 5:45am EDT
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By Michael Shields

ALPBACH, Austria (Reuters) - Any support the European Central Bank provides to struggling euro zone members should not ease the pressure on those countries to get their financial houses in order, Austrian Finance Minister Maria Fekter said on Thursday.

"We have to see what the ECB can do by its statutes but we also have to tighten controls because it cannot be that this leads to moral hazard," she said in an interview with Reuters.

"We have to check that countries do their homework and based on these control mechanisms we can help," she added.

Fekter, a hardliner when it comes to fiscal discipline, noted that financial help to struggling euro zone countries has always come with conditions, and this has to apply to the ECB as well.

"If the ECB helps, it can only happen with conditions," she said.

ECB President Mario Draghi has pledged to do what it takes to protect the euro zone, including launching new systems for buying bonds from the indebted Italy and Spain,

Fekter declined to discuss the situation in Greece before the "troika" of the ECB, European Union and the International Monetary reports back on how the country is fulfilling terms of its bailout.

But Fekter took a dim view of the idea of writing down the value of bilateral loans to Athens.   Continued...

Austrian Finance Minister Maria Fekter reacts as they attends a news conference to present the annual economy report for 2012 in Vienna July 9, 2012. REUTERS/Herwig Prammer