ECB cannot accept debt relief for Greece: board member

26th January 2015, Comments 0 comments

The European Central Bank cannot take part in any debt cut for Greece, one of its executive board members, Benoit Coeure, said in a newspaper interview published on Monday.

"It is not up to the ECB to decide whether Greece needs debt relief," since that was a political decision, Coeure told the business daily Handelsblatt.

"But it's absolutely clear that we cannot agree to a debt relief that includes Greek bonds that are located at the ECB," he said.

"That's impossible for legal reasons," he added.

During the debt crisis, the ECB bought up huge amounts of Greek debt and still has some of it on its books.

Cutting that debt would be tantamount to so-called monetary financing -- printing money to get a government out of debt -- which is strictly forbidden under the ECB's own statutes.

On Sunday, Greek voters handed a decisive victory to radical left party Syriza in elections, putting the country on a collision course with the EU and international creditors.

Syriza leader Alexis Tsipras wants to renegotiate the terms of Greece's 240-billion-euro ($269 billion) bailout with the European Union and the International Monetary Fund.

Coeure also said European governments needed to implement reforms and consolidate their national budgets to create sustainable growth and jobs.

© 2015 AFP

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