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Greek cen banker says Euro is source of stability
Sun, 4th Jan 2009 11:10
ATHENS, Jan 4 (Reuters) - The euro currency has proven itself to be a source of security and trust in the current economic turmoil, Greece's central banker said in an article published on Sunday.
'Without it, the countries that adopted the euro would have been exposed to serious turbulence, such as those experienced in 1992 and 1993,' Bank of Greece Governor George Provopoulos said in an article written for Greece's Kathimerini newspaper.
'It is no coincidence that other countries in the European Union are now thinking of joining the euro zone,' said Provopoulos, who is also a member of the European Central Bank's (ECB's) governing council.
Member countries must, however, adhere to the guidelines of the EU's Stability and Growth Pact for it to remain successful, he said.
However, in cases such as Greece's, where there is high public debt and a large current account deficit, relaxing fiscal responsibility would have a reverse affect.
'Such a relaxation would worsen fiscal credibility, would increase the cost of servicing the debt and the current account problems,' he said.
Expanding the euro into new member states is a challenge for the ECB and for the common currency, while there are three main challenges for central banks worldwide: globalisation, technological progress and ageing populations.
'It is important to revise the global system and strengthen it with regulations.'
During the past 10 years the euro has benefited the most when fiscal imbalances were avoided, especially in countries with large public debt, he said.
'The continued success of the (single currency) ... will also depend on the ability of member states to align their fiscal and structural policies in ways that strengthen and promote the public good,' he said.
(Reporting by George Hatzidakis; Editing by Sharon Lindores)
Keywords: GREECE CENBANKER/
(george.hatzidakis@reuters.com ; +30 210 3376455; Reuters Messaging: george.hatzidakis.reuters.com@reuters.net)
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
'Without it, the countries that adopted the euro would have been exposed to serious turbulence, such as those experienced in 1992 and 1993,' Bank of Greece Governor George Provopoulos said in an article written for Greece's Kathimerini newspaper.
'It is no coincidence that other countries in the European Union are now thinking of joining the euro zone,' said Provopoulos, who is also a member of the European Central Bank's (ECB's) governing council.
Member countries must, however, adhere to the guidelines of the EU's Stability and Growth Pact for it to remain successful, he said.
However, in cases such as Greece's, where there is high public debt and a large current account deficit, relaxing fiscal responsibility would have a reverse affect.
'Such a relaxation would worsen fiscal credibility, would increase the cost of servicing the debt and the current account problems,' he said.
Expanding the euro into new member states is a challenge for the ECB and for the common currency, while there are three main challenges for central banks worldwide: globalisation, technological progress and ageing populations.
'It is important to revise the global system and strengthen it with regulations.'
During the past 10 years the euro has benefited the most when fiscal imbalances were avoided, especially in countries with large public debt, he said.
'The continued success of the (single currency) ... will also depend on the ability of member states to align their fiscal and structural policies in ways that strengthen and promote the public good,' he said.
(Reporting by George Hatzidakis; Editing by Sharon Lindores)
(george.hatzidakis@reuters.com ; +30 210 3376455; Reuters Messaging: george.hatzidakis.reuters.com@reuters.net)
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
