Former ECB Member Stark on CNBC Talking Greece, Eurozone

Germany's Jurgen Stark was interview on CNBC earlier today. Stark addressed the ongoing situation in the Eurozone. Overall, Stark stated that that structural reforms were needed, and that the people living in indebted countries were aware of the needed reform. Stark stated that European governments have committed themselves to provide additional funding to the IMF of about 200 billion euros. Still, what is important is that periphery countries stick to the programs they have committed to and do what they can do avoid spillover or contagion. Stark stated that he would vote for a second LTRO if he were still a member of the European Central Bank. Stark stated that it is appropriate to provide liquidity, but central bank must be prepared to absorb excess liquidity when the economy picks up. Otherwise, it could great raise inflation expectations. Last fall, Stark made headlines when he resigned from the ECB over a disagreement he had with the institution over the appropriate direction for monetary policy. Stark stated that the impact of his resignation was short lived and ultimately overshadowed by other events. He stated that the ECB's intervention in soverign credit market posptoned neccessary adjustments in indebted countries. He reiterated his belief that central bank should not finance government--something which is directly enshrined in European treaties with prohibitions of government financing. Stark ended on a positive note, stating that European governments have a plan to tackle crisis, stablize debt/gdp ratio and restructure their economies. Yet, this will lead to ongoing tensions cannot and Stark said one cannot expect positive results overngiht. In the end, he believes that Europe will overcome crisis and will be stronger than before.