Bloomberg News

ECB’s Paramo Says Solving Crisis Is Governments’ Responsibility

November 04, 2011

(See EXT4 for debt crisis news.)

Nov. 4 (Bloomberg) -- European Central Bank Executive Board member Jose Manuel Gonzalez-Paramo said it’s not the ECB’s task to solve Europe’s sovereign debt crisis.

“As the ECB has repeatedly stressed, the main responsibility for resolving this crisis lies with governments and the financial sector,” Gonzalez-Paramo said at a conference in Madrid today. “Governments’ unwillingness to adapt their fiscal and competitiveness policies to the requirements” of the currency union “lies very much at the heart of the current sovereign debt crisis.”

Gonzalez-Paramo’s comments echo remarks by new ECB President Mario Draghi, who ruled out ramping up ECB bond buying to reduce governments’ borrowing costs. The Frankfurt-based central bank yesterday cut its benchmark lending rate by a quarter point to 1.25 percent.

Gonzalez-Paramo also called “excessive risk-taking by an over-leveraged and inadequately regulated financial sector” for the current turmoil.

--Editors: Simone Meier, Craig Stirling

To contact the reporter on this story: Gabi Thesing in London at gthesing@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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