European Central Bank Executive Board Member Benoit Coeure said that Greece exiting the euro area was not a consideration and urged the Greek authorities to take decisive action.
In an interview to the Greek daily Kathimerini, text of which was published on the ECB website, Coeure said, “It is out of the question to speculate about such a scenario. The euro area needs Greece just as Greece needs the euro.”
Saying that “an overwhelming majority of the Greek population want to keep the euro”, he urged the Greek government to take the appropriate steps to ensure that its policies are in line with public’s clear references.
The uncertainty regarding the country’s bailout programme and further funding has been dragging down economic activity further, he said.
“The current situation is clearly not sustainable and requires quick and decisive action by the Greek authorities to turn things around,” Coeure said.
The policymaker also noted tangible progress in the talks between Greece and the troika of lenders – the ECB, the European Commission and the International Monetary Fund.
“Still, significant differences on substance remain and substantial further work is needed. We wish these discussions to succeed,” Coeure said.
Greece’s banking sector is better capitalized that earlier, thanks to the earlier capital injections and continued progress in bank restructuring, he noted. The progress that has been achieved in the Greek banking sector is currently overshadowed by the heightened political uncertainty, hence the importance of prompt policy action, Coeure added.
Coeure also said that the ECB will not take measures such as capital controls. Such steps are for the national governments to decide, he noted.
The ECB will continue to offer liquidity to the Greek banks as long as they remain solvent and have adequate collateral, as is the case currently, the policymaker said.
The emergency funding to Greek banks is considerable, Coeure said, citing that the Greek banking system currently receives around EUR 110 billion of central bank liquidity, more than double the level of last December. It was also 61 percent of Greek GDP, the highest level of any euro area country.
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