Bloomberg News

Stark Says Italy Default Not ECB Working Assumption, IR Reports

October 19, 2011

Oct. 20 (Bloomberg) -- European Central Bank Executive Board member Juergen Stark said the ECB doesn’t expect Italy to default, Latvian magazine Ir reported, citing an interview.

“It’s not our working assumption,” Stark was quoted as saying in a transcript of the interview. At the same time, the country should have fixed its budgets “much earlier,” he said.

The ECB “will not” and “cannot step in,” Stark said when asked if the central bank would act if the European Financial Stability Facility proves to be too small to put a firewall around Italy.

“There is a prohibition of monetary financing” and the ECB can’t replace governments, Stark said, according to the transcript. Stark said he hasn’t recommended the ECB’s government bond purchase program.

--Editors: Alan Crosby, Simone Meier, Kevin Costelloe

To contact the reporters on this story: Gabi Thesing in London at; Aaron Eglitis in Riga at

To contact the editors responsible for this story: Balazs Penz at; Craig Stirling at

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