Europe won't let euro zone state fail: ECB's Trichet
BERLIN (Reuters) - Europe will not allow its weakest members to collapse under their debt burden, European Central Bank President Jean-Claude Trichet said in an interview with German weekly Welt am Sonntag.
According to the paper, Trichet ruled out the possibility of Greece, Spain or Portugal not being able to pay back their debt.
"We will not allow this to happen. We did not create the Maastricht Treaty in order to then go back again," he said in the interview due to be published on Sunday.
Trichet again defended the ECB's decision to buy back government bonds last month, in order to calm bond markets and bring down borrowing costs for heavily-indebted Greece and other financially strained euro zone members.
"The situation was dramatic. Europe was at the epicenter of the crisis at this time," he said.
The controversial step to start buying government debt opened a deep rift at the ECB's top table, pitting Trichet against ECB and Bundesbank heavyweight Axel Weber. Weber has openly criticized the move, arguing it creates "serious stability risks."
"In the last few weeks I understood one thing: in Germany, some things are interpreted differently," Trichet said.
"The no-bailout clause means that there is no duty to offer subsidies or transfer. But it does not mean that in exceptional circumstances, one country should not be allowed to offer support to another."
The Maastricht Treaty, which paved the way for the euro single currency, says no euro zone country should bail out another. Germany has dismissed the idea of the EU becoming a "transfer zone," where rich members subsidize poorer states.
"I wish the German public had reacted with the same indignation toward the breach of the European stability pact in 2004 as toward our decision to buy state bonds," said Trichet.
(Reporting by Sarah Marsh; editing by Patrick Graham)
Ci vuole una NUOVA ALLEANZA tra la cittadinanza europea e la banca centrale. La BCE potrebbe redistribuire la rendita monetaria (occultata nel bilancio) attraverso un BASIC INCOME per tutti i cittadini europei. Allora sì che diventerebbe una cosa seria. Ricordiamoci che per assaltare ed occupare la banca centrale irachena sono bastati cinque uomini....
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