Trichet Rejects 'Special' ECB Help for Greece

European Central Bank President Jean-Claude Trichet said the ECB isn't willing to grant Greece special treatment to alleviate the country's economic turmoil even as Athens's latest plan to deal with the crisis was met with skepticism by investors, The Wall Street Journal reported. "No government or state can expect from us any special treatment," Mr. Trichet said following the European Central Bank's monthly meeting. The comments, which came as the ECB kept its key lending rate unchanged at 1%, helped push the cost of insuring Greek sovereign debt against default to a record. Greece has been under intense scrutiny by the European Union, the markets and credit-rating agencies since it revealed late last year that its budget deficit would hit 12.7% of GDP, four times the EU's 3% limit. The ECB doesn't provide direct aid to individual members of the 16-member euro zone. But it does provide Greece and other countries with indirect support through its lending facilities, which allow Greek commercial banks—heavy owners of Greek sovereign debt—to use those bonds as collateral to obtain inexpensive central-bank credit. The ECB is due to go back to its old collateral policy at year-end. If Greek government debt gets downgraded further, it risks becoming ineligible as ECB collateral when the rules that were in place before the financial crisis are reinstated. "We will not change our collateral framework for the sake of any individual country," Mr. Trichet said. He dismissed speculation in the financial markets that Greece's soaring budget deficit will eventually force it to exit the EU and euro system, calling it "an absurd hypothesis." One day earlier, Mr. Papandreou said there was "no chance" Greece will exit the euro. Read more. (Subscription required.)