ECB not happy with debt bill
The European Central Bank said yesterday a proposed Greek loan-relief program for businesses could have «a negative impact on market liquidity.» The ECB said in a legal opinion that current economic conditions in Greece are «adverse» and that it sees a need for a «thorough» assessment of the impact of the proposed law. «Restructuring a debt without the debtor’s proven ability to repay would only postpone the occurrence of the default, thus increasing the level of debt in the financial system and impinging on the ability of credit institutions to fund the recovery of the economy,» the ECB said. The Frankfurt-based bank added that allowing struggling entrepreneurs who settle debt to continue operating without being penalized for their past defaults would negatively affect market conditions. «The proposed deletion of credit history data could make credit institutions more cautious in their lending and increase the cost of financing the economy,» it said.