No Bail-Out For Greece - German Economist

The former European Central Bank chief economist Otmar Issing, writing in Germany's Frankfurter Allgemeine Zeitung, says that there should be no bail-out for Greece.

"Nothing would weaken the euro more and bury the reputation of the monetary union as a community of stable money more than a blatant breach of the precept of financial policy discipline," he writes.

"If the no bail-out clause is breached, all the dams will break. The Greek disease will spread," he adds.

"Each state is itself responsible for its own public finances, member states do not guarantee the debts of others. This principle allows no compromises. If an exception is made, there will be no holding back. The fear that Greece could set off a chain reaction would become a certainty," he says.

"If the community helps Greece, which blatantly breached the community's rules and went into the crisis with heavy debt, how can you then refuse others?" he concludes.

The euro might garner a bit of strength from that, we shall have to wait and see. The pound currently stands at 1.1520 against the single currency, posting a 2.8% gain for the month of January.