Greece has not asked for bridge loan: ECB’s Nowotny

WASHINGTON (BestGrowthStock) – Greece has not asked for a bridging loan to cover a funding gap if its request for EU and IMF aid is not approved quickly enough, European Central Bank Governing Council member Ewald Nowotny said on Friday.

Greece, which must refinance an 8.5 billion euro ($11.4 billion) bond on May 19, has said the European Commission could potentially offer such a loan.

“As far as I know this has not yet been an issue and has to be discussed with the Greek authorities. … Greece has not asked for that,” Nowotny told reporters on the sidelines of G20 meetings in Washington.

Debt-stricken Greece appealed to its European partners and the IMF for emergency loans on Friday, yielding to overwhelming market pressure to set in motion the first financial rescue of a member of the euro zone.

Nowotny said it was important that aid be extended “quickly.” He said coordination work on the aid has already begun between different authorities.

“The official process has started. It always takes some time until money is really flowing,” he said. “It should not take too long.”

“One of the reasons why we want to act fast is just to make sure that these, let’s say, speculative discussions, come to an end as fast as possible.”

In Berlin, German Chancellor Angela Merkel said Europe and the IMF could make no aid payments to Greece until they had established the country’s financial crisis represented a risk to the whole euro zone, and that the priority for EU governments was to ensure the stability of the euro.

Nowotny said the Greek government should be commended for its efforts to rein in its deficit.

“This has been one of the major preconditions for starting the (aid) program … There have been very bold decisions by (Greece).”

He added he did not see a necessity for a Plan B because he was sure the current one would work.

Nowotny also said the aid package should serve to deter speculation against individual euro zone countries.

He said no other euro zone country’s situation resembled that of Greece and warned about trying to pull other countries into the debt crisis.

“The fiscal situation of, let’s say, Spain and Portugal, cannot be compared with the situation of Greece,” he said.

“It should be made very clear that there is no economic basis for negative news about these countries.”

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(Reporting by Kristina Cooke, Mark Felsenthal, Daniel Burns, Ana da Costa and Daniel Bases; editing by Patrick Graham, Ron Askew, John Stonestreet)

Greece has not asked for bridge loan: ECB’s Nowotny