BUSINESS

Bundesbank chief says no to Greek haircut, yes to reforms

Bundesbank chairman and European Central Bank board member Jens Weidmann ruled out another haircut to Greece’s state debt, urging Athens instead to press on with reforms to their completion.

In an interview with German newspaper Bild on Saturday, Weidmann said that “a debt haircut would not constitute a solution to the basic problems of the country,” adding that Greece must continue on the difficult path of reforms to its end.

“The country must correct the competitiveness problems it has brought upon itself. It must become more productive and streamline its budget further. More help from abroad would only buy it some time, but it cannot be a substitute for the necessary reforms in the country itself,” he stated.

He went on to say that the financial crisis in the eurozone will be fanned again if member states abandon the reform course.

“The euro is in the restoration phase. At that stage you need strength and resolve, otherwise there is the risk of falling back. At the moment markets have quietened down, but this could be some misleading safety. The crisis could be fanned again like a fire,” warned Weidmann.

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