The Greek Sovereign Debt Crisis and ECB Policy

The Greek sovereign debt crisis has delayed the ECB’s exit from its current highly expansionary monetary policy stance. It has also complicated it since the ECB now hold considerable quantities of Greek public debt, which exposes the ECB to considerable credit risk. Moreover, the delay of the exit means that it has to take place in a situation on which public debts are even larger. There is still risk of contagion. [IP/A/ECON/FWC/2009_040/C3] 8 June 2010. This document was requested by the European Parliament's Committee on Economic and Monetary Affairs. Stefan Gerlach The Greek Sovereign Debt Crisis and ECB Policy ____________________________________________________________________________________________