ECB’s Weber-Greek crisis poses no threat to euro

The motivation behind the Greek aid package is to ensure wider financial stability, not to bail out Greece, Axel Weber, one of the European Central Bank's top policymakers said on Wednesday.

"The motive for preparing support measures is to secure financial stability and not help for Greece, which got itself into this difficult situation," Weber said in a speech at a meeting of German savings banks.

He also dismissed threats to the euro from the problems. "European monetary union is not endangered by Greece seeking aid, and we will make sure it stays this way," he said.

Weber, an ECB Governing Council member and the head of Germany's Bundesbank, reiterated recent comments that inflation risks in the 16-country euro zone were beginning to point upwards.

"Current interest rates are appropriate given the only moderate outlook for growth in the euro zone and the continued low medium term inflation risks, although compared to the March projections these are tilted upwards."

The ECB published its latest bank lending survey on Wednesday which showed banks tightened their credit rules for firms and households further in the first quarter and expect to toughen them again. (for story click [ID:nFLARFE60I]).

Weber said a widescale credit crunch in Germany was unlikely but could not be ruled out altogether.

"All in all there are currently few signs of a broad-based credit crunch in Germany nor of massive supply-side hindrances in the German credit market. But certainly such a scenario cannot be entirely ruled out."