BUSINESS

Euro membership remains ECB's plan A for Greece

Greece?s sustained membership of the European single currency remains the ?plan A? of the European Central Bank, Executive Board member Joerg Asmussen said on Monday.

?I?m working on plan A and not considering plan B,? Asmussen said at an Axel Springer AG event in Berlin. ?If others are working on plan B, that?s OK, but as Mario Draghi has said, our preference is for Greece to remain in the euro and that?s what we?re working on.?

He conceded that said the situation in Greece and Europe is ?difficult,? and stressed that the euro is the ?anchor of stability in the crisis? and that Germany still benefits from its membership of the common currency despite the turmoil.

Fellow Executive Board member Jose Manuel Gonzalez-Paramo said policymakers have a ?strong preference? for Greece to stay in the euro area. ?It is a constitutional matter,? Gonzalez-Paramo told reporters in London on Monday.

?There is no exit foreseen in the treaty.? He declined to comment on remarks made by European Union Trade Commissioner Karel De Gucht that officials from the ECB and the European Commission are working on contingency plans to deal with a possible Greek exit from the euro.

Meanwhile Jean-Claude Trichet, the former president of the ECB, said he cannot imagine Greece leaving the euro and considers such a step the worst option for the 17 nations sharing the currency, according to an interview in Austrian magazine Profil.

?I absolutely can?t imagine that,? Trichet was quoted as saying by the Vienna-based weekly. ?And I consider this to be the worst option.?

Trichet also said that there is no scientific evidence that higher inflation creates growth and that therefore the ECB must remain committed to its price stability goal, according to the interview. [Bloomberg]

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