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ECB exec defends non-use of IMF for Greece

The EU's commitments to help Greece resolve its public finance problems should be more effective than a Greek use of International Monetary Fund support, European Central Bank executive committee member Lorenzo Bini Smaghi said on Saturday.

Writing in Italy's leading daily Corriere della Sera, Bini Smaghi said the Greek crisis was not only the result of Greece's fiscal policy but also the incapacity of the EU to discipline properly members of the eurozone.

“To leave the IMF the job of resolving the Greek crisis signifies not only that the coordination mechanisms of economic policy that are the basis for Europe monetary union have not functioned in the past, but also renounces remedying this,” he writes in the newspaper article.

In addition, in some cases recently the IMF has not succeeded in reaching its desired result and has asked for support from the EU, he said.

Thus on Greece, the EU decided this month to take charge of the situation, agreeing to measures that the country should adopt and to monitoring by the European Commission in conjunction with the European Central Bank, he said.

“If the measures adopted are credible, the commitment signed up to by all (EU) heads of government is worth a lot more than funds handed out by multilateral institutions and will allow for confidence to be found again,” he said.

The Greek crisis can be an occasion for a strengthening of monitoring mechanisms for EU member state economies and public finances and greater coordination of economic policy to prevent similar situations in future, he said. (Reuters)