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ECB outraged by Slovak refusal to aid Greece-sources
Fri Sep 10, 2010 11:03am EDT
* Trichet outraged by Slovak "no" to Greek loan
* ECB would not back Slovak euro entry, had it known
* Won't back other applicants if a risk of similar action
By Martin Santa and Jan Strupczewski
BRATISLAVA/BRUSSELS, Sept 10 (Reuters) - Slovakia set a bad example by refusing support for a loan to Greece, and the European Central Bank will not support euro entry by others unless sure they will not take similar steps in the future, ECB President Jean-Claude Trichet was quoted as saying.
A memo from this week's meeting of euro zone finance ministers, seen by Reuters, said Trichet was outraged at the refusal by Slovakia to participate in the Greek bailout.
Several EU officials said privately Slovakia could be snubbed by some of the 26 other EU member states because its decision is likely to complicate talks on the bloc's budget, making the rich net payers less willing to grant aid to poorer countries.
"Trichet was outraged at the last Eurogroup by Slovakia's refusal of a bilateral loan to Greece and said that had the ECB known Slovakia would behave like that, it would not have endorsed Slovakia's euro adoption," the memo summarising the discussion said.
"It sets a bad example for future candidate countries. Also (he said) that the ECB would not back future euro zone applicants if there is a risk they will do something similar."
Two euro zone sources confirmed Trichet made the comments.
"That is a fairly faithful account of what was said," one source said.
The parliament in Slovakia, the poorest of the 16 countries that use the euro, last month ruled against contributing 816 million euros ($1.05 billion) to a 110 billion euro bailout fund for Greece [ID:nLDE67A21W].
NO COMMENT
"Some European institutions voiced concerns about Slovakia's stance on the Greek loan during the Eurogroup meeting. Since this was a meeting of a confidential nature, we will neither confirm nor decline individual comments," Slovak finance ministry spokesman Martin Jaros said.
The ECB had no comment.
In its convergence reports, the ECB evaluates how well non-euro zone EU members fulfil euro entry criteria.
Besides inflation, the euro entry criteria are: budget deficit below 3 percent of GDP, gross public debt below 60 percent/GDP, nominal long-term interest rates no more than 2 percentage points higher than the average of the three states with lowest inflation.
Bratislava said taxpayers in a country that has kept its debt under control should not have to bail out a profligate one.
Slovakia's new right-leaning government opposed taking part in the bailout despite a pledge by the previous administration to support Greece, where the budget deficit had ballooned so much that it threatened the stability of the euro zone.
The aid package will go ahead despite the refusal by the Slovak parliament, but Bratislava's position dealt a blow to euro zone unity in the face of the financial crisis and Slovakia has run into sharp criticism from European governments.
However, the Slovak position has been backed by the Czech Republic, a country that has taken a slow approach toward euro entry and currently has no target date.
A major issue in the Slovak refusal to help Greece is that Slovakia, which only joined the euro in 2009, is the euro area's poorest state and its wages and pensions are far below those in Greece, which makes aid to Athens widely unpopular.
The monthly minimum wage in the ex-communist country which joined the European Union in 2004 is 308 euros, well below the Greek minimum legal wage of 863 euros. (Writing by Jan Lopatka; editing by Stephen Nisbet)
***
I parenti poveri ...
Stavolta Trichet si è arrabbiato: non ho mai sentito dichiarazioni così pesanti ...
Fri Sep 10, 2010 11:03am EDT
* Trichet outraged by Slovak "no" to Greek loan
* ECB would not back Slovak euro entry, had it known
* Won't back other applicants if a risk of similar action
By Martin Santa and Jan Strupczewski
BRATISLAVA/BRUSSELS, Sept 10 (Reuters) - Slovakia set a bad example by refusing support for a loan to Greece, and the European Central Bank will not support euro entry by others unless sure they will not take similar steps in the future, ECB President Jean-Claude Trichet was quoted as saying.
A memo from this week's meeting of euro zone finance ministers, seen by Reuters, said Trichet was outraged at the refusal by Slovakia to participate in the Greek bailout.
Several EU officials said privately Slovakia could be snubbed by some of the 26 other EU member states because its decision is likely to complicate talks on the bloc's budget, making the rich net payers less willing to grant aid to poorer countries.
"Trichet was outraged at the last Eurogroup by Slovakia's refusal of a bilateral loan to Greece and said that had the ECB known Slovakia would behave like that, it would not have endorsed Slovakia's euro adoption," the memo summarising the discussion said.
"It sets a bad example for future candidate countries. Also (he said) that the ECB would not back future euro zone applicants if there is a risk they will do something similar."
Two euro zone sources confirmed Trichet made the comments.
"That is a fairly faithful account of what was said," one source said.
The parliament in Slovakia, the poorest of the 16 countries that use the euro, last month ruled against contributing 816 million euros ($1.05 billion) to a 110 billion euro bailout fund for Greece [ID:nLDE67A21W].
NO COMMENT
"Some European institutions voiced concerns about Slovakia's stance on the Greek loan during the Eurogroup meeting. Since this was a meeting of a confidential nature, we will neither confirm nor decline individual comments," Slovak finance ministry spokesman Martin Jaros said.
The ECB had no comment.
In its convergence reports, the ECB evaluates how well non-euro zone EU members fulfil euro entry criteria.
Besides inflation, the euro entry criteria are: budget deficit below 3 percent of GDP, gross public debt below 60 percent/GDP, nominal long-term interest rates no more than 2 percentage points higher than the average of the three states with lowest inflation.
Bratislava said taxpayers in a country that has kept its debt under control should not have to bail out a profligate one.
Slovakia's new right-leaning government opposed taking part in the bailout despite a pledge by the previous administration to support Greece, where the budget deficit had ballooned so much that it threatened the stability of the euro zone.
The aid package will go ahead despite the refusal by the Slovak parliament, but Bratislava's position dealt a blow to euro zone unity in the face of the financial crisis and Slovakia has run into sharp criticism from European governments.
However, the Slovak position has been backed by the Czech Republic, a country that has taken a slow approach toward euro entry and currently has no target date.
A major issue in the Slovak refusal to help Greece is that Slovakia, which only joined the euro in 2009, is the euro area's poorest state and its wages and pensions are far below those in Greece, which makes aid to Athens widely unpopular.
The monthly minimum wage in the ex-communist country which joined the European Union in 2004 is 308 euros, well below the Greek minimum legal wage of 863 euros. (Writing by Jan Lopatka; editing by Stephen Nisbet)
***
I parenti poveri ...
Stavolta Trichet si è arrabbiato: non ho mai sentito dichiarazioni così pesanti ...
