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German Bundesbank still sees risk of Greek euro exit

Germany’s central bank Deutsche Bundesbank sharply criticized the European Central Bank for the ways it handles the eurozone rescue and still sees risks for Greece to exit the euro area. In a 29-page report the Bundesbank analyses the risks of the euro rescue policies.  The report was prepared by DB president Jens Weidmann and was filed to  German constitutional Court since quite some time, but it was published by daily Handelsblatt on Friday.

Bundesbank significantly criticizes the interim financing of Greece through the so-called Emergency Liquidity Assistance (ELA) last year.

“The provision of liquidity through the Euro-system to meet the financing needs in Greece arises as particularly problematic and represents the adoption of fiscal responsibilities though the monetary policy. Therefore the ECB took a high risk, as the departure of Athens from the euro is at no time classified as unlikely.”

Read full report in Handelsblatt (GER)

 

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