ECB’s Nowotny Says Grexit Now Not as Impactful as in 2013

Were Greece to leave the euro, it would not have the same impact on the euro zone as it would have had two years ago, an ECB policymaker said on Monday, urging the Greek government to provide “numbers” to qualify for further aid.

“One should not overestimate the whole story,” Ewald Nowotny, a member of the European Central Bank’s policy-setting Governing Council, told broadcaster CNBC. He said he did not expect a deal when euro zone ministers meet later this week.

“It (a Greek exit) does not have that impact or potential impact on the euro zone as it would have had … some two years ago. I really don’t see a contagion in the financial and economic sense,” he said. Nowotny added, however, that he could not predict the “psychological effect”.

The head of Austria’s central bank urged the government in Athens to provide “numbers”. “Time is running out,” he said.

Asked if a euro [EUR=] weakening to parity with the dollar would not be unwelcome, Nowotny reiterated that the ECB does not target exchange rates as part of its monetary policy.

“Historically, we have had a situation already when there had been parity, so it would not be something unheard of, but it’s very difficult to make forecasts,” he said.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza