Veteran European Central Bank policymaker Ewald Nowotny has backed turning the European Stability Mechanism (ESM) into a IMF-styled lender and for it to take over from the ECB in Greece’s bailout program.
“[The] ESM might turn into a ‘European Monetary Fund,’ and I think that makes a lot of sense,” Nowotny, one of the longest-serving members of the ECB’s Governing Council, said on Friday.
This would show “a rich part of the world is able to solve imbalances by themselves,” while the setup might also allow the ECB to end its formal role in eurozone bailouts, something it has received public criticism for. “We are having a discussion on this,” Nowotny said.
“We don’t have specific knowledge of the pension system in Greece… If we have the ESM as a specialized institution and we concentrate all these kind of surveillance tasks in the ESM. I think it will be much better.”