Greece deal slashes contagion risk -UniCredit CEO

Eurozone finance ministers approved a 30 billion euro emergency aid plan for debt-plagued Greece on April 11.

Together with at least 10 billion euros expected from the IMF in the first year, it could add up to the biggest multilateral financial rescue ever attempted.

“This has been a very important intervention,” Alessandro Profumo, the head of UniCredit , told Reuters Insider television. “In my opinion the contagion risk is dramatically lower today.”
He also ruled out a spillover to eastern Europe, a region where UniCredit is a major player. “Today we are not seeing specific risk (in eastern Europe),” he said.

“To talk of them (eastern European countries) as a single country is an incredible mistake.”

Profumo added that he expects the ECB to continue to phase out lending support to commercial banks this year despite the recent problems.

“Our view is that in the second half of the year there will be a gradual withdraw of this liquidity policy in order to move back to a more normal situation.”

Speaking earlier at an ECB conference he called for a joint private sector/government bailout plan to fund rescue packages in future crises.

“We think it is important to have a private/public partnership… and a stabilisation fund should be the right way to follow.”

“We think this fund can be funded by the banks and partially by the governments,” he added.


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