Euro zone member Slovakia will have strong reasons to reconsider its help to indebted euro group member Greece, the Eurogroup Chairman Jean-Claude Juncker was quoted as saying.
He also said that June establishment of the euro zone's emergency loan mechanism, the European Financial Stability Facility (EFSF), calmed markets and added that he was against changing euro zone rules in a way to allow exclusion of euro members.
I think that Slovakia will have strong reasons to reconsider its cooperation in the package for Greece, Juncker told Slovenian daily Delo in an interview that will be published in its Monday edition. He did not elaborate.
If Slovakia would finally decide not to cooperate in bailing out Greece, the mechanism foresees that other members can provide its share, he added.
Slovakia, the poorest euro zone member, in July became the last euro member to sign the EFSF, but its government at the same time recommended parliament not support providing a bilateral loan to Greece, part of a separate European bailout plan for the country.
Juncker welcomed the EFSF mechanism, saying that since establishment of the mechanism conditions truly calmed down and the markets again behave rationally.
He said he was strongly against possible changing of euro zone rules so as to allow countries to leave the zone or be expelled from it for not abiding by euro group rules.
If we would change the (Lisbon) treaty so as to have a system that would enable exclusion and exit (from the euro group), we would introduce an element of constant instability. Almost every month there would be speculation on who will be excluded and who will leave the euro group, he said.
He also urged European Union states to reduce public deficit and debt in a way that would not hurt economic recovery.
Consolidation of the European public finances is not an option, it is a necessity. If deficits and public debts remain high there will be no growth in Europe.
Therefore we have to remove fiscal incentives from economic flows from 2011 onwards. I hope that states that are introducing saving programs would do so without obstructing economic recovery, Juncker said.
He also said he did not see reasons for credit rating agencies to have reduced ratings of Portugal and Greece as both countries introduced serious and credible programs of public finance consolidation.
(Reporting by Marja Novak; Editing by Maureen Bavdek)