Reuters
July 22, 2011
The Greek aid package weakens incentives for euro zone countries to maintain solid finances and leads toward a fiscal transfer union, ECB policymaker Jens Weidmann said on Friday.
Euro zone leaders agreed on a 109 billion euro ($156 billion) package for debt-stricken Greece on Thursday and gave the bloc's rescue fund, the EFSF, the power to buy government bonds from investors and provide lifelines to troubled euro zone banks and governments.
The European Central Bank relented on its opposition to Greek default and signaled it was willing to let this happen temporarily as long as it was strictly a one-off.
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