ATHENS (Reuters) - The risk of the euro zone’s debt crisis spreading further has waned, European Council President Herman van Rompuy told a Greek newspaper on Tuesday.
“The threat of the crisis spreading has been reduced significantly, or disappeared. It is very clear from the drop in Spanish (yield) spreads,” he told daily newspaper Kathimerini in an interview.
The EU has battled to stem a debt crisis that has raged for over a year and pushed Greece, Ireland and Portugal to accept bailouts, hoping new measures unveiled at a euro zone leaders summit last month will reassure jittery markets.
Van Rompuy said corrective measures taken by Spain — viewed by markets as the next euro zone state at risk of needing a rescue — were strong and “I think investors have understood that Spain is applying a very credible reform programme.”
Van Rompuy, who arrives in Athens later on Tuesday on an official visit, said he had no doubt the euro would emerge stronger from the crisis.
He said reforms being applied by Greece were inevitable and should have been adopted years ago. He was aware of debt restructuring talk but emphasis should be placed on applying the economic adjustment plan the country has agreed with the EU and the IMF.
“We should give it some time credit until reforms start to bring results. It can be done. I know it from firsthand experience as budget minister in Belgium when we managed to cut public debt from 130 percent of GDP in 1995 to 114 percent in 1999,” he said.
Reporting by George Georgiopoulos; Editing by John Stonestreet