EUR

From MNI FX Bullets

ECB BONELLO: Greek default soon unlikely if IMF releases tranche


- Stakes are very high for greece,euro area and beyond
- Greek fallout could be of 'broad geographical scope'
- Default may hit fin systems,have impact on recovery
- Key to restore confidence in EMU as soon as possible
- Not beyond Eurogroup ingenuity to devise a solution
- ECB has to apply collateral, counterparty rules
- ECB won't take part in debt rollover--even if voluntary
- Hard to assess what results in credit, rating event
- ECB exercised mandate very flexibly, must draw line
- Demands to do more an encroachment on ECB independence
- Effective counter-measures can be taken only by govts
- Need reliable backstop; larger EFSF is one option
- Greek cbank may give ELA to banks even if default
- ELA decision up to Greek cbank, must apply rules

[11:40 EDT 06/17]
ECB BONELLO: Indicated July hike, information not changed
- Mon pol is still accommodative; real rates are negative
- To re-widen rate corridor when EONIA is closer to MRO
- Widen corridor when less excess liquidity,volatility
- Risks to global and EMU recovery not negligible now
- See higher input prices moving along production chain
- Not seen 'excessively large' increase in wage demands
- No discussions to officially close ECB's SMP facility
- See Main Wire for exclusive MNI interview

Ashraf