ECB’s Constancio says loan to Greece no bailout

BRUSSELS, March 23 (BestGrowthStock) – Lending money to Greece at
‘normal’ interest rates would not be a bailout, European Central
Bank policymaker Vitor Constancio said on Tuesday.
Constancio, who heads the Portuguese central bank and has
been nominated as ECB vice-president, said he did not think it
was necessary to change the European Union treaty to find a way
to support Greece, struggling with high debt and deficits.

“We have to understand what (a) bailout is. What is in the
(treaty) article is that it is forbidden for the monetary union
or a country to assume debt from another member country,” he
told a hearing into his nomination before the European
Parliament’s economics committee.

“But of course credit is not a bailout. Credit is credit. If
credit is given at interest rates that are normal, not
subsidised, then of course that cannot be construed as a
bailout.”
Constancio brushed off the prospect of a double-dip
recession in the euro zone as a result of the ECB phasing out
emergency lending measures, but gave no indication that a rise
in official interest rates was on the cards any time soon.

“The fact that they (non-standard measures) are now
gradually withdrawn will not by itself create a problem of a
double-dip coming from that withdrawal, I don’t see that,” he
said.

“As long as we have a depressed economy, as long as a result
of that there are no risks of inflation in the near future, then
of course monetary policy will continue to play that role of
supporting the economy.”
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(Reporting by Marcin Grajewski and Jan Strupczewski, writing by
Krista Hughes; editing by Patrick Graham)

ECB’s Constancio says loan to Greece no bailout