Mr Constancio welcomed committee amendments to the economic governance proposals that had strengthened the Commission's role, toughened political and reputational sanctions, and ensured that these sanctions can take effect earlier. He warned however that moves to increase exemptions could undermine the application of the stability and growth pact.

 

MEPs asked Mr Constancio about developments in Greece, and particularly growing rumours that its debt could be rescheduled, about the exposure of banks to sovereign debt, and whether there were clear indications of how much risk the ECB was exposed to as a result of the bond-buying programmes and other such exceptional measures it had been forced to take in 2010.

 

Mr Constancio conceded that rumours that Greece might default would be difficult to quash because some parties stood to gain from such a scenario, despite the "very bold measures taken". The ECB's risk exposure was alleviated by various factors, not least because it had bought bonds at discounted rates, he said, noting however that the ECB would need the bailout programmes to succeed for its purchases to be paid back. On banks' exposure to sovereign debt, Mr Constancio said that the upcoming bank stress tests will give considerable information to help analysts to understand the degree of exposure.

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