by Jeff Black
10:25 PM EET
March 25, 2015
(Bloomberg) -- European Central Bank Governing Council
member Yannis Stournaras said a Greek exit from the euro area isn’t an option
and wouldn’t help the country’s economy in the long term, as he urged the
government to act quickly to agree on reforms with the country’s creditors.
“Grexit would deliver no benefit but a lot of pain,”
Stournaras, who heads the Greek central bank, said at an event in London on
Wednesday. “The new Greek government has a unique opportunity to implement bold
structural reforms, which would be backed by a large majority of political
forces in the country.”
Euro-area ministers are losing patience with the government
of Alexis Tsipras, almost five weeks after they gave him an extra four months
to complete an overhaul of the Greek economy in return for aid. The dispute has
unsettled the banking system, and Stournaras won permission from the ECB on
Wednesday to increase the availability of emergency funds.
“There was some outflow of deposits due to uncertainty,”
said Stournaras, a former Greek finance minister. “Emergency Liquidity
Assistance has been provided so that there’s no problem for the banking
system.”
The Governing Council raised the cap on ELA provided by the
Bank of Greece to just above 71 billion euros ($78 billion) in a telephone
conference, people familiar with the matter said, asking not to be named
because the call was private. The increase of more than 1 billion euros was the
biggest this month.
Stournaras argued that if Greece implements “bold” reforms
in pensions, social security and labor markets, it could hope for some relief
on the cost and duration of its debt.
“Extending maturities and reducing interest rates on the
outstanding debt may improve the growth outlook of the Greek economy,” he said.
“Alternative options could also be considered to improve the sustainability of
Greece’s public debt. However, they might be more contentious, as they likely
involve some costs for euro-area partners.”
To contact the reporter on this story: Jeff Black in
Frankfurt at jblack25@bloomberg.net
To contact the editors responsible for this story: Fergal
O’Brien at fobrien@bloomberg.net Paul Gordon, Scott Lanman
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