The European Central Bank is not preparing for an exit of Greece from the euro area, but aiming to strengthen the bonds with the new government, ECB Executive Board member Benoit Coeure said.
In the transcript on an interview to the French Magazine Alternatives Economiques, published on the ECB website on Tuesday, Coeure said, “The exit of Greece is not a scenario we are working on.”
He also said that all the efforts being made at the moment were aimed at strengthening the relationship with Greece, given the new priorities of the government, in a context that remains that of the euro area and which involves rights but also the duty to respect common rules.
Quizzed on the effects of the quantitative easing, Coeure said the massive stimulus helped to boost trust in the ECB’s monetary policy transmission mechanism. The QE also helped to lower funding costs for companies and households, rebalance portfolios and influence the exchange rate, though it is not a policy target in itself.
“The impact of the QE materializes when the recovery is strengthening,” the policymaker said.
“If we add the price of oil, we have a conjunction of favorable factors for recovery and investment. So in the present state of things there is no reason to worry about the recovery of the euro area in 2015 and 2016,” he said, adding that the said factors were short-term in nature, while a longer term concern was the ability to recover the growth potential of the euro area.
Coeure also said that QE certainly reduced the risk of contagion in the Eurozone, but the present context was very different from that of 2012. For countries like Portugal, Spain and Ireland, the focus was no longer an exit from the euro area, but to capitalize on economic recovery to quickly bring down unemployment and return balance to the economy.
He also said that the ECB creates favorable conditions for long-term investment and it is then for governments and European institutions to take advantage of such conditions.
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