Thursday, June 30, 2011

Trichet cool on French Greek plan

June 30, 2011

European Central Bank President Jean-Claude Trichet said on Thursday reserved judgment on a French proposal to resolve Greece's debt crisis but another ECB policymaker called the plan "a very interesting step."

The French plan has emerged as a possible compromise that could pave the way for private investors' involvement in a rollover of Greek debt without triggering a default or payout in credit insurance -- scenarios the ECB says must be avoided.

The ECB's stance is crucial because it has threatened to refuse to continue accepting Greek bonds as collateral in its funding operations in the event of either credit insurance being triggered, forced private sector involvement, or a rating cut.

"At this stage, we have not yet (got) a position," Trichet told the European Parliament's Economic and Monetary Affairs Committee when asked about the French proposal.

"We are very alert but I cannot give you a precise judgment on what is going on," he added.


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