ECB sees 'significant' contagion risks in eurozone
The risks of contagion from the eurozone debt crisis are "very significant" and it is up to governments to contain those risks, the European Central Bank said on Monday.
In a speech delivered at a banking conference in Milan and made available on the ECB's website, bank vice president Vitor Constancio said that while it was difficult to make such an assessment, all the evidence suggested the risk of contagion was there.
"No matter how difficult it is to collect all relevant information and to design the appropriate analytical tools, most pieces of evidence point to the existence of very significant financial and sovereign contagion risks in the euro area at the present juncture," Constancio said.
And "containing such contagion is of great importance for overcoming the ongoing European debt crisis," he continued.
"There would be enormous economic and social damage if the ECB and other competent authorities do not respond appropriately and decisively within their respective mandates."
The ECB, for its part, has acted decisively and effectively.
"But this alone is not enough," Constancio said, urging governments to "live up to their responsibilities" and ratify the planned reforms of the EU's bailout fund, the European Financial Stability Facility, as agreed in July.
"Moreover, all countries should meet their fiscal targets and introduce structural reforms that restore competitiveness and growth potential," the central banker said.
"If all parties honour their commitments, I am sure that Europe will successfully weather these difficult times," he concluded.
© 2011 AFP