UPDATE 2-ECB’s Constancio – default no reason to quit euro as Greece cash pinch worsens

UPDATE 2-ECB’s Constancio – default no reason to quit euro as Greece cash pinch worsens

FRANKFURT, April 20 (Reuters) – A country that defaults would not have to leave the euro, the European Central Bank’s vice president said on Monday, in frank remarks about Greece that also touched on possible capital controls and showed how acute Athens’ problems have become.

Speaking as Greece ordered public sector entities to transfer idle reserves to the central bank to help with a cash squeeze, Vitor Constancio discussed the possibility of a debt default and controls on the movement of money, saying neither necessarily meant a departure from the currency bloc.

“If a default will happen … the legislation does not allow that a country that has a default … can be expelled from the euro,” he told the European Parliament, saying that Greek banks had been told not to increase their exposure to the state to avoid “a possible credit event regarding the state”.

 

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Defitsiidi terrorismi vastase pataljoni eriüksuslane (finantsignorantsuse vastu võitlemise osakond). Treening: MMT, postkeinsism, Tartu Ülikool Majandusteadus
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