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16 November 2011

Telegraph: Sir Mervyn King says ECB is right not to bail out eurozone


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Sir Mervyn King said he had "every sympathy" with the European Central Bank's reluctance to bail out indebted eurozone countries.


The Bank of England Governor said it was up to governments in the region, and not central banks, to prop up individual countries. "The euro area does have the resources, if you were to regard it as a single country, to make appropriate transfers, within itself,", he said, speaking at the Bank's quarterly Inflation Report press conference.

He suggested that political unwillingness among the stronger eurozone countries to bail out weaker countries did not mean the ECB should have to step in. "The European Central Bank feels and with total justification that it's not the job of a central bank to do something which a government could do perfectly well do itself, but doesn't particularly want to admit to doing", he said. "I think it's very important to recognise that there are circumstances when governments will try and put pressure on central banks to do things they would like central banks to do, in order to avoid their having to own up to the actions that they would like someone else to carry out."

Full article



© The Telegraph


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