erkki liikanen : interview in suddeutsche zeitung interview ( edited script ) with mr erkki liikanen, governor of the bank of finland, in suddeutsche zeitung, conducted by mr markus zydra and published on 7 february 2015. * * * suddeutsche zeitung : mr liikanen, why did the ecb council decide to cut greek banks off from ecb credit? liikanen : greek banks have a counterparty status with the eurosystem. in january, we communicated that the collateral waiver based on which the greek government bonds qualify as eligible collateral to eurosystem refinancing assumes a successful conclusion of a programme review. this could no longer be assumed. so this was a very logical decision, as we have to follow our rules. but the ecb kept greece in the emergency liquidity programme via the bank of greece? liikanen : every case will be treated according to ela rules and procedures. every bank that receives ela must be solvent. the ecb wants to help the euro zone to recover economically. that is why the ecb decided to buy government bonds for 1, 1 trillion euro? many germans resent the decision. what do you tell them? liikanen : this was a decision to deliver on our mandate which is price stability. when inflation and as well as inflation expectations drop clearly below our definition for price stability, and the ecb runs out of traditional monetary policy measures like lowering interest rates, then non - standard measures, such as large scale asset purchases, are needed to maintain our policy target. by the way, the arguments in favor of the decision were also shared by most economists at home. and you have to do it rather sooner than later because if you get in a deflation spiral, it becomes very difficult to get out. of course i understand the german discussion. by the way in finland for example, there is also criticism that we acted too late. the decision was disputed – not only by the german members. how has this dispute changed the working atmosphere in the council? liikanen : there were different opinions among the members of the governing council about the timing. it is a non - standard monetary policy measure, we all agree. the working atmosphere is and has been professional and full of substance. you can justify both, doing it now or buying bonds later, but based among the best information we had, i came to the conclusion that risks

important of these fora is the group of seven or g7, where finance ministers and central bank governors of the seven most important industrialised nations of the world meet several times a year to discuss issues of mutual interest. the g5, soon to become the g7, was created as an informal forum in the 1970s. it is sometimes criticised for not reflecting the political and economic realities of the twenty - first century. i have had the privilege of attending all its meetings over the past 18 years. my experience is that the g7 meetings have proven an invaluable forum for cooperation on macroeconomic policies and for giving, when appropriate, signals to market participants. the g7 is adapting to the new political and economic realities through what is termed “ outreach “. the g7 countries have acknowledged the necessity of involving other players in their discussions. in particular, it is now standard practice for finance ministers and governors from emerging economies – and sometimes also from developing countries – to be invited to join these discussions. this is the case for oil - producing countries, in particular. for instance, in spring 2006 finance ministers from certain oil - exporting countries joined the g7 in a discussion on global imbalances. at the level of heads of state and government another important step was made a few months ago. a new form of informal cooperation between g8 members ( i. e. the group of seven and russia ) and important emerging economies has been launched. challenges have become global. global challenges require global solutions. and global solutions cannot be found without the active participation of important players, from both mature and emerging market economies. india is of course part of these important emerging economies, as are brazil, china, mexico and south africa. at their meeting in heiligendamm last summer, the g8 countries and these important emerging economies committed to embark on a high - level dialogue on issues of global dimension, issues which will be at the top of the agenda in the years ahead. they include, for instance, cross - border investment, research and innovation, energy efficiency and development. the heiligendamm process is a very welcome one. the creation of the informal grouping of the g20 in 1999 is a major change in global governance, fully taking into account the structural transformation associated with the growing importance of the emerging economies. it was created to examine major economic and financial global issues at the time of the asian crisis, fully recognising that all economies that had a systemic influence