UBS AG Chairman and former European Central Bank Governing Council member Axel Weber said Greece should solve its fiscal problems within the borders of the euro region.
“If I look at the euro, it’s a one-way system,” Weber said in a panel discussion in Frankfurt late last night. While solving the problems “within the borders” of the euro area means choosing the “hard way,” it will “probably be the best way,” he said.
Greek lawmakers failed to form a government after inconclusive elections earlier this month, fueling speculation about an exit of the country from the euro. The ECB said today that it cut some Greek banks off from refinancing operations until they are recapitalized, forcing them to tap the Emergency Liquidity Assistance program provided by the Greek central bank.
“The euro and any discussion about this not being a one-way arrangement will just lead to another genie-out-of-the-bottle debate,” Weber said. “When the markets start pricing that genie-out-of-the-bottle effect it just produces more repercussions,” he said.