European stocks lower as ECB member denies Greek debt forgiveness

<p>European stocks have retreated as Ewald Nowotny states the ECB will not offer Greece debt forgiveness.</p>

The major eurozone stock indices have commenced the week's trading lower today (October 29th), as one European Central Bank (ECB) governing council member claims the institution is banned from participating in Greece's massive debt restructuring programme.

Ewald Nowotny said such involvement would be tantamount to printing money to finance governments and for the ECB forgiving debt is not an option, Bloomberg reports.

The ECB holds some €45 billion (£36.1 billion) in Greek government bonds purchased as part of the now defunct Securities Markets Programme.

Speaking to the press in the Austrian capital city of Vienna today, Mr Nowotny stated: "For the ECB, forgiving debt isn't possible because it would be equivalent to indirect state financing."

He concluded that the ECB "certainly can't" take part in actions such as these in relation to the public sector.

At 11:35 GMT, all the major European indices were down, with the Dax shedding 0.7 per cent to 7179.8 points, the Cac 40 sliding by one per cent to 3401.1 points and the Madrid Ibex losing 0.8 per cent to 7708.3 points.

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