Governments to Get ECB’s Bond Profits, Praet Tells Tijd, Echo

European Central Bank Executive Board member Peter Praet said profits from the sale of the ECB’s Greek bond holdings will be distributed via the national central banks to the euro-area governments, which can “spend the money as the wish,” De Tijd and L’Echo reported.

The Frankfurt-based central bank can’t participate in a private-sector debt writedown of Greek assets and the ECB is prohibited from financing governments’ debt by buying their bonds, the newspapers quoted Praet as saying in a joint interview.

Praet told the newspapers that while the ECB’s three-year bank loans are an “important operation,” they are not a “bazooka” and the program is an “extraordinary measure” that is “temporary,” the newspapers cited him as saying.

The policy maker said the Greek austerity plan is “feasible” and support from the public is “crucial,” according to the newspapers.

To contact the reporter on this story: John Martens in Brussels at jmartens1@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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