Greece should stay in euro but deal must be 'strong'

European Central Bank president Mario Draghi said Wednesday that the ECB wanted Greece to remain in the single currency, but that a "strong agreement" was needed between Athens and its creditors.

The ECB's decision-making "governing council wants Greece to say in the euro, but it should be a strong agreement," Draghi told a news conference, saying a deal should lead to "growth and social fairness."

Draghi was speaking at a news conference after the ECB held its key interest rates unchanged at their current record low levels and said its raft of recent unconventional measures, such as a contested bond purchase programme, were gradually making themselves felt in the eurozone economy.

But Greece was the main focus of attention at the meeting, as Athens scrambles to reach a deal with its creditors ahead of a looming debt deadline on Friday.

Greek Prime Minister Alexis Tsipras was scheduled to meet EU Commission president Jean-Claude Juncker in Brussels later on Wednesday.

Draghi said he would not be present at that meeting.

"I can't give you a real-time report on how the negotiations are going, also because I'm here in Frankfurt and the negotiations are not taking place here," he said.

"But also because they are actually in a state of flux. There is a general will and strong determination that in the end an agreement will be found," Draghi said.

"A strong agreement is one that produces growth, that has social fairness, but that is also fiscally sustainable and addresses the remaining sources or factors of financial instability in the financial sector," Draghi said.

Greece and its international creditors have exchanged proposals to reach a deal to unlock 7.2 billion euros ($8 billion) to help Athens make a critical repayment on Friday. But months of fractious talks have been deadlocked over creditors' insistence that Athens undertake greater reforms which Greece's anti-austerity government has refused to match.

There are fears that Greece could default, possibly setting off a chain reaction that could end with a messy exit from the eurozone.

Until a deal has been reached, the ECB said it cannot restore a key channel of liquidity to Greek banks in accepting Greek bonds as collateral for its refinancing operations.

One of the conditions for that to change would be "a credible perspective for the successful conclusion of the current review," Draghi said, adding that "we are not there yet".
Source: AFP