ECB uncomfortable with leading role in Greek funding drama

With no political appetite for a 'transfer union' that could see wealthier countries subsidize Greece, the central bank figures prominently among the main options for staving off an impending funding crunch in Athens. This is awkward for the ECB, an independent central bank desperate to stay out of the political debate over Greece's future but whose lender-of-last-resort function may leave it as the only institution able to stop an economic collapse there. "The ECB is justified in being cautious because of the highly political exposure," said Richard Portes, professor of economics at London Business School, noting that the bank has just completed a sensitive, political debate over a sovereign bond-buying plan. After that debate, the ECB sought to remove itself from the political firing line.

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