ECB’s political tensions flare over Greece / Berlin stands firm on bail-outs

The European Central Banks fierce opposition to Greece’s delaying debt repayments erupted into a full-blown and public dispute during May 2011. Egged on by the German government, Jean-Claude Juncker, the Luxembourg Prime Minister who also chairs meetings of eurozone finance ministers, floated the idea of a 'soft' restructuring, which could include a voluntary extension of Greek debt maturities.

In response, ECB policymakers accused him of 'using meaningless phrases'. A debt restructuring would spell catastrophe for Greece, the bank warned, with severe consequences for the rest of the eurozone.

La Stampa, 20.5.11: Permanent stability mechanism unveiled (via PressEurop) http://www.presseurop.eu/en/content/news-brief/665101-permanent-stability-mechanism-unveiled

ESO: Background information: Merkel rejects Greek debt restructuring / EU looks at Greek debt options http://www.europeansources.info/record/merkel-rejects-greek-debt-restructuring-eu-looks-at-greek-debt-options/

ESO: Background information: The trouble with the European Stability Mechanism http://www.europeansources.info/record/the-trouble-with-the-european-stability-mechanism/

ESO: Background information: EU agrees incomplete financial package http://www.europeansources.info/record/eu-agrees-incomplete-financial-package/

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