ECB's Weidmann urges honest troika report on Greece - paper

Sat Nov 10, 2012 7:06am EST
 
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BERLIN (Reuters) - Europe's politicians seem to have already decided to continue funding Greece, European Central Bank policymaker Jens Weidmann was quoted as saying on Saturday.

The ECB Governing Council member and Bundesbank chief said international lenders must still make an "unembellished and honest" assessment of the country's finances.

"Politicians have evidently decided to continue financing Greece," Weidmann was quoted as saying by German newspaper Rheinishe Post.

Asked if the report of the troika of lenders - the International Monetary Fund, European Commission and European Central Bank - on Greece could nonetheless be independent, Weidmann said this was problematic.

"How can you objectively assess the completion of a program, if you are too afraid of the consequences of a negative conclusion?" he said. "I am relying on the fact the troika will deliver both an unembellished and honest assessment of the situation in Greece before payments are delivered."

Weidmann said the ECB and national central banks within the euro zone had bought up a considerable amount of Greek debt and thereby become one of Greece's biggest creditors, but could not take a haircut on that debt.

"The central banks may not waive Greece's debt, that would be a direct transfer and therefore would be tantamount to a forbidden monetary financing of a state," he said.

ECB President Mario Draghi said earlier this week the ECB was unlikely to help Greece much further in its bailout because it was prohibited from providing direct aid.

Weidmann reiterated his criticism of the ECB's plan to buy up the debt of struggling euro zone states.   Continued...

 
Jens Weidmann, president of German Bundesbank, addresses the media in a news conference at the G20 Summit in Mexico City November 5, 2012. REUTERS/Bernardo Montoya