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Nowotny on Greece: „We Do Not Have Unlimited Time“

Published: July 9, 2012; 16:00 · (Vindobona)

Ewald Nowotny, the governor of OeNB (Austrian Central Bank) is concerned about the Greek austerity program.

Nowotny on Greece: „We Do Not Have Unlimited Time“ / Picture: © Agenda Austria 2020

At the Ecofin meeting in Brussels, the development in Greece will be discussed today and tomorrow. After the new Greek Prime Minister Antonis Samaras had admitted to have failed the austerity targets and to need more time to fulfill the requirements of the creditors, OeNB´s governor Ewald Nowotny expressed his concerns.

Nowotny underlined the massive lack of reforms in Greece and referred to the political unwillingness to introduce such reforms. He hopes that the Ecofin Council will re-launch the discussion process.

The Greek exit could cost up to € 10bn for Austria. The Austrian Minister of Economics Reinhold Mitterlehner believes that Austria would not lose this money if Greece remain in the Eurozone. At the moment, Austria´s bilateral aids for Greece amount to 1.5bn. Moreover, there are guarantees of € 4.2bn for Greece, Ireland and Portugal.

According tot he U.S. rating agency Moody´s, the existence of the common currency is endangered. This would also affect countries with the best solvency like Austria, Moody´s explained. The biggest problem of the Eurozone would be still Greece.

Also Fitch sees the danger of an infection. The Greek exit would put pressure on countries like Germany, Fitch argued. The crisis management of he Eurozone would be insufficient, the rating agency criticized.

„We must not forget that we do not have unlimited time in Greece.“ Nowotny emphasizes that the Greek funding requirements may be covered only from the outside.


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