benoit cœure : interview in europe 1 interview with mr benoit cœure, member of the executive board of the european central bank, in europe 1, conducted by mr jean - pierre elkabbach on 26 january 2015. * * * welcome, benoit cœure. good morning. good morning. so, the greek people have handed a huge victory to alexis tsipras, who has promised them an end to austerity and social suffering. will greece ’ s €320 billion debt be waived? i think this is a two - way challenge. there is a dual responsibility. europe must show that it can adapt to a change in government, even a radical one, in a member state. this is europe ’ s democratic responsibility. equally, mr tsipras must comply with the rules of the european game. so what does this mean for the debt? it will be discussed, but let me remind you that the €40 billion that greece owes to france is not owed to speculators or the financial markets : it is owed to the french taxpayers. cancelling this debt would be giving a gift of €40 billion to greece. any restructuring of the debt must be meaningful. it must allow greece to overcome this situation while continuing with reforms. the french are owed €40 billion? how much are the germans owed? around €60 billion. so, you are saying that, if the debt can be renegotiated, it will happen soon. but in the meantime is it sufficient for mr tsipras to say that he will pay it back, or must he pay it back? he must pay it back. those are the rules of the european game. there is no room for behaving unilaterally in europe. this does not preclude, for example, the restructuring of this debt from being discussed. however, i must stress that this money does not belong to the european central bank. this money belongs to governments. this discussion will take place between mr tsipras and the european governments. and should take place very quickly? it will no doubt start today or tomorrow. yes. and do you think that greece, after this massive victory by mr tsipras and the greek people, must fulfil its commitments whatever happens, in other words that it must pay off its debts? it is essential for greece to continue with the reforms, for the greek economy to pull through. this is what is in the interests of the greek people

of assessing risk, we monitor a broad range of economic and financial indicators. included in this group are a number of measures of liquidity and credit creation in the economy. by most standard measures, aggregate liquidity does not appear excessive. the monetary aggregate m2 expanded only 5 - 1 / 4 percent during 2003, somewhat less than nominal gdp, and actually contracted during the fourth quarter. the growth of nonfederal debt, at 7 - 3 / 4 percent, was relatively brisk in 2003. however, a significant portion of that growth was associated with the record turnover of existing homes and the high level of cash - out refinancing, which are not expected to continue at their recent pace. a narrower measure, that of credit held by banks, also grew only moderately in 2003. all told, our accommodative monetary policy stance to date does not seem to have generated excessive volumes of liquidity or credit. that said, as we evaluate the risks to the economy, we also assess developments in financial markets. broad measures of equity prices rose 25 percent in 2003, and technology stocks increased twice as quickly. the rally has extended into this year. and as i noted previously, credit spreads on corporate bonds have narrowed considerably, particularly for speculative - grade issues. this performance of financial markets importantly reflects investors'response to robust earnings growth and the repair of business balance sheets over the past few years. however, history shows that pricing financial assets appropriately in real time can be extremely difficult and that, even in a seemingly benign economic environment, risks remain. the outlook for the federal budget deficit is another critical issue for policymakers in assessing our intermediate - and long - run growth prospects and the risks to those prospects. as you are well aware, after a brief period of unified budget surpluses around the beginning of this decade, the federal budget has reverted to deficits. the unified deficit swelled to $ 375 billion in fiscal 2003 and appears to be widening considerably further in the current fiscal year. in part, these deficits are a result of the economic downturn and the period of slower growth that we recently experienced, as well as the earlier decline in equity prices. the deficits also reflect fiscal actions specifically intended to provide stimulus to the economy, a significant step - up in spending for national security, and a tendency toward diminished restraint on discretionary spending. of course, as economic activity continues to expand, tax revenues should strengthen and the deficit will tend to narrow, all else being equal. but even