Bloomberg News

Europe Must Do More to Show Alternative to Greek Exit, OECD Says

May 22, 2012

Euro-area officials need to do more to show Greece that there is an alternative to giving up the single currency, Organization for Economic Cooperation and Development Secretary General Jose Angel Gurria said.

“We cannot do anything about what the Greek voters decide, but I don’t think we’ve been strong enough and clear enough in terms of demonstrating that there is an alternative,” Gurria told reporters today in Paris. “Are we offering the necessary safety net and therefore a way not out of the euro but out of the crisis? I think we can do better.”

European leaders gather tomorrow in Brussels to seek ways to stem a sovereign debt crisis that is now in its third year as Greek voters prepare to go to the polls again next month following an inconclusive election on May 6. The euro has dropped more than 3 percent against the dollar this month on concern that Greece may opt to leave the 17-nation region.

Gurria said that the European Central Bank in particular would reap gains by showing more firepower now rather than waiting to use it until after a “hypothetical” Greek exit.

As to concern about “encouraging people to misbehave” by offering more support, “frankly, we’ve gone way beyond that,” he said. “You need to make the markets understand that you are going to do whatever it takes to maintain this stability. Europe has the capacity, it has the wealth. Europe is going to emerge stronger from this, but in the meantime it’s got to face the music.”

To contact the reporter on this story: Mark Deen in Paris at markdeen@bloomberg.net

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


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