Greece has been warned by a top European Central Bank policymaker that it has a year to bring public finances back under control or risk having its bonds disqualified for use as collateral by banks borrowing ECB liquidity. The comments by Axel Weber, Germany’s Bundesbank president, intensify pressure on Greece’s new Socialist government after revelations that its budget is in far worse shape than feared. They also come amid further signs of eurozone weakness, as S&P changed Spain’s ratings outlook to negative and Ireland unveiled its harshest budget in years. See also FT Alphville here, and here.
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